Investing can be hard but the potential fo an individual stock to pay off big time inspires us. Not every pick can be a winner, but when you pick the right stock, you can win big. Take, for example, the Vobile Group Limited (HKG:3738) share price, which skyrocketed 645% over three years. In more good news, the share price has risen 17% in thirty days. It really delights us to see such great share price performance for investors.
In light of the stock dropping 8.3% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.
View our latest analysis for Vobile Group
Vobile Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 3 years Vobile Group saw its revenue grow at 62% per year. That's well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 95% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like Vobile Group can sometimes sustain strong growth for many years. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).SEHK:3738 Earnings and Revenue Growth June 30th 2022
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think Vobile Group will earn in the future (free profit forecasts).
A Different Perspective
The last twelve months weren't great for Vobile Group shares, which performed worse than the market, costing holders 45%. The market shed around 19%, no doubt weighing on the stock price. Investors are up over three years, booking 95% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. 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. Take risks, for example - Vobile Group has 1 warning sign we think you should be aware of.
Vobile Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK 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.