Despite the downward trend in earnings at Tchaikapharma High Quality Medicines AD (BUL:THQM) the stock ascends 7.0%, bringing five-year gains to 156%

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%. For example, the Tchaikapharma High Quality Medicines AD (BUL:THQM) share price has soared 156% in the last half decade. Most would be very happy with that. We note the stock price is up 7.0% in the last seven days.

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

See our latest analysis for Tchaikapharma High Quality Medicines AD

Given that Tchaikapharma High Quality Medicines AD only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, Tchaikapharma High Quality Medicines AD can boast revenue growth at a rate of 4.4% per year. That's not a very high growth rate considering the bottom line. So we wouldn't have expected to see the share price to have lifted 21% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. Some might suggest that the sentiment around the stock is rather positive.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Tchaikapharma High Quality Medicines AD has rewarded shareholders with a total shareholder return of 18% in the last twelve months. Having said that, the five-year TSR of 21% a year, is even better. 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 instance, we've identified 1 warning sign for Tchaikapharma High Quality Medicines AD that 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 Bulgarian 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.