Did The Underlying Business Drive OneSoft Solutions' (CVE:OSS) Lovely 992% Share Price Gain?

For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held OneSoft Solutions Inc. (CVE:OSS) shares for the last five years, while they gained 992%. And this is just one example of the epic gains achieved by some long term investors. It's also good to see the share price up 48% over the last quarter.

We love happy stories like this one. The company should be really proud of that performance!

Check out our latest analysis for OneSoft Solutions

OneSoft Solutions wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years OneSoft Solutions saw its revenue grow at 51% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 61%(per year) over the same period. Despite the strong run, top performers like OneSoft Solutions have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

We're pleased to report that OneSoft Solutions shareholders have received a total shareholder return of 31% over one year. However, that falls short of the 61% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with OneSoft Solutions (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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