Bombay Rayon Fashions (NSE:BRFL) Shareholders Have Enjoyed An Impressive 127% Share Price Gain

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Bombay Rayon Fashions Limited (NSE:BRFL). Its share price is already up an impressive 127% in the last twelve months. It's up an even more impressive 205% over the last quarter. On the other hand, longer term shareholders have had a tougher run, with the stock falling 92% in three years.

See our latest analysis for Bombay Rayon Fashions

Bombay Rayon Fashions isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Bombay Rayon Fashions actually shrunk its revenue over the last year, with a reduction of 50%. So we would not have expected the share price to rise 127%. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Bombay Rayon Fashions' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Bombay Rayon Fashions shareholders have received a total shareholder return of 127% over one year. Notably the five-year annualised TSR loss of 14% per year compares very unfavourably with the recent share price performance. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Bombay Rayon Fashions you should be aware of, and 1 of them is concerning.

But note: Bombay Rayon Fashions may not be the best stock to buy. So take a peek at this free list 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 IN exchanges.

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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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