Is Adecoagro's (NYSE:AGRO) Share Price Gain Of 140% Well Earned?

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Adecoagro S.A. (NYSE:AGRO) share price has soared 140% in the last year. Most would be very happy with that, especially in just one year! It's also good to see the share price up 30% over the last quarter. The longer term returns have not been as good, with the stock price only 26% higher than it was three years ago.

View our latest analysis for Adecoagro

Given that Adecoagro only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Adecoagro actually shrunk its revenue over the last year, with a reduction of 7.8%. We're a little surprised to see the share price pop 140% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth

We know that Adecoagro has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Adecoagro will earn in the future (free profit forecasts).

A Different Perspective

We're pleased to report that Adecoagro shareholders have received a total shareholder return of 140% over one year. There's no doubt those recent returns are much better than the TSR loss of 1.4% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Adecoagro (of which 1 can't be ignored!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. 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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