Recent 12% pullback isn't enough to hurt long-term Silex Systems (ASX:SLX) shareholders, they're still up 814% over 5 years

Silex Systems Limited (ASX:SLX) shareholders might be concerned after seeing the share price drop 12% in the last week. But that doesn't change the fact that the returns over the last half decade have been spectacular. In fact, during that period, the share price climbed 814%. Impressive! So it might be that some shareholders are taking profits after good performance. Only time will tell if there is still too much optimism currently reflected in the share price. Anyone who held for that rewarding ride would probably be keen to talk about it.

Although Silex Systems has shed AU$80m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Before we look at the performance, you might like to know that our analysis indicates that SLX is potentially overvalued!

Because Silex Systems made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, Silex Systems can boast revenue growth at a rate of 30% per year. Even measured against other revenue-focussed companies, that's a good result. Fortunately, the market has not missed this, and has pushed the share price up by 56% per year in that time. Despite the strong run, top performers like Silex Systems have been known to go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.

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

If you are thinking of buying or selling Silex Systems stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Silex Systems shareholders have received a total shareholder return of 126% over the last year. That's better than the annualised return of 56% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. For example, we've discovered 3 warning signs for Silex Systems that you should be aware of before investing here.

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 AU 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.