Not a surprising move AYO Technology Solutions Limited (JSE:AYO) shares are up 17% over the past three months. But that doesn’t overrule the unimpressive returns of the past three years. After all, the stock is down 42% over the past three years, well below the market.

Given the past week, investor sentiment for AYO Technology Solutions is not positive, so let’s see if there’s a mismatch between the fundamentals and the stock price.

Before looking at performance, it’s good to know what our analysis shows. AYO may be underrated.

AYO Technology Solutions is not currently profitable, so most analysts focus on revenue growth to understand how fast the underlying business is growing. Shareholders of unprofitable companies typically expect significant increases in earnings. That’s because it’s hard to be confident that a company is sustainable if it’s seeing very little revenue growth and no profit.

Over the past three years, AYO Technology Solutions revenue has grown at an average annual rate of 2.8%. We’re not very impressed with that given that we’re taking losses in pursuit of growth. In fact, the stock has fallen 12% over the past three years. Shareholders are probably hoping that growth will pick up soon. But the real benefit for shareholders is whether the company can start making a profit.

The chart below shows how revenue and returns have changed over time (click the image to see the exact values).

revenue and revenue growth
JSE: AYO Earnings and Earnings Growth Sep 17, 2022

this freedom If you want to explore the stock further, our interactive report on the strength of AYO Technology Solutions’ balance sheet is a great place to start.

What is the dividend?

It is important to consider total shareholder return and share price return for a particular stock. The TSR includes the value of dividends (assuming they have been reinvested) and discounted capital raising or spin-off earnings, while the stock return reflects only changes in the stock price. Arguably, the TSR is a more comprehensive representation of the returns generated by equities. AYO Technology Solutions has a TSR of 6.3% over the last three years. This outperforms the aforementioned stock return. This is primarily a result of dividend payments!

another point of view

We are pleased to report that AYO Technology Solutions returned 24% of total shareholder return to shareholders last year. This includes the dividend value. That increase actually exceeds the 2.1% (annual) TSR generated over the three years. Improving returns to shareholders suggest that stocks are becoming more popular over time. It’s always interesting to track stock performance over the long term. However, many other factors should be considered to better understand AYO technology solutions. for example, Three Warning Signs of AYO Technology Solutions (2 is a bit offensive) You have to be careful.

of course AYO Technology Solutions may not be the best stock to buySo you might want to watch this freedom Collection of growing strains.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the ZA exchange.

This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Is not …

Valuation is complicated, but we’re here to help make it simple.

Check out our comprehensive analysis including the following to find out if AYO technology solutions are potentially overrated or underrated. Fair value estimates, risks and warnings, dividends, insider trading and financial health.

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