Finance House P.J.S.C (ADX:FH) jumps 12% this week, taking three-year gains to 35%

Low-cost index funds make it easy to achieve average market returns. But in any diversified portfolio of stocks, you'll see some that fall short of the average. That's what has happened with the Finance House P.J.S.C. (ADX:FH) share price. It's up 34% over three years, but that is below the market return. Zooming in, the stock is up a respectable 16% in the last year.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Finance House P.J.S.C

We don't think that Finance House P.J.S.C's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. 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.

Finance House P.J.S.C actually saw its revenue drop by 6.1% per year over three years. The falling revenue is arguably somewhat reflected in the lacklustre return of 10% per year over three years, which falls short of the market return. As a general rule we don't like it when a loss-making company isn't even growing revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Finance House P.J.S.C's financial health with this free report on its balance sheet.

A Different Perspective

Finance House P.J.S.C shareholders gained a total return of 16% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 4% over half a decade It is possible that returns will improve along with the business fundamentals. 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 - Finance House P.J.S.C has 1 warning sign we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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