Investors Who Bought Funtastic (ASX:FUN) Shares A Year Ago Are Now Up 450%

Funtastic Limited (ASX:FUN) shareholders might be concerned after seeing the share price drop 12% in the last quarter. But over the last year the share price has taken off like one of Elon Musk's rockets. In that time, shareholders have had the pleasure of a 450% boost to the share price. So it is not that surprising to see the stock retrace a little. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).

See our latest analysis for Funtastic

Given that Funtastic 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Funtastic saw its revenue shrink by 18%. This is in stark contrast to the splendorous stock price, which has rocketed 450% since this time a year ago. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. To us, a gain like this looks like speculation, but there might be historical trends to back it up.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on Funtastic's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Funtastic shareholders have received a total shareholder return of 450% over one year. Notably the five-year annualised TSR loss of 12% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Funtastic better, we need to consider many other factors. For instance, we've identified 4 warning signs for Funtastic (2 make us uncomfortable) that you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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