ReNew Energy Global (NASDAQ:RNW) investors are sitting on a loss of 27% if they invested a year ago
It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in ReNew Energy Global Plc (NASDAQ:RNW) have tasted that bitter downside in the last year, as the share price dropped 27%. That's disappointing when you consider the market declined 6.7%. Because ReNew Energy Global hasn't been listed for many years, the market is still learning about how the business performs.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
View our latest analysis for ReNew Energy Global
Given that ReNew Energy Global didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last twelve months, ReNew Energy Global increased its revenue by 29%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 27%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
ReNew Energy Global shareholders are down 27% for the year, even worse than the market loss of 6.7%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 9.2% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand ReNew Energy Global better, we need to consider many other factors. For example, we've discovered 1 warning sign for ReNew Energy Global that you should be aware of before investing here.
Of course ReNew Energy Global may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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