Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lotmorethan 100%. For example, theNaked Brand Group Limited(NASDAQ:NAKD) share price has soared 109% in the last 1 year. Most would be very happy with that, especially in just one year! Better yet, the share price has risen 24% in the last week. Unfortunately the longer term returns are not so good, with the stock falling 100% in the last three years.

Since the stock has added NZ$94m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Naked Brand Group

Given that Naked Brand Group 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Naked Brand Group actually shrunk its revenue over the last year, with a reduction of 11%. So we would not have expected the share price to rise 109%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).NasdaqCM:NAKD Earnings and Revenue Growth August 25th 2021

Thisfreeinteractive report on Naked Brand Group's balance sheet strength is a great place to start, if you want to investigate the stock further.A Different Perspective

It's nice to see that Naked Brand Group shareholders have gained 109% (in total) over the last year. This recent result is much better than the 26% drop suffered by shareholders each year (on average) over the last three. It could well be that the business has turned around -- or else regained the confidence of investors. It's always interesting to track share price performance over the longer term. But to understand Naked Brand Group better, we need to consider many other factors. For example, we've discovered3 warning signs for Naked Brand Group(2 are significant!) that you should be aware of before investing here.

But note:Naked Brand Group may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).

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.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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