RoboTechnik Intelligent Technology's (SZSE:300757) five-year earnings growth trails the 48% YoY shareholder returns

It hasn't been the best quarter for RoboTechnik Intelligent Technology Co., LTD (SZSE:300757) shareholders, since the share price has fallen 12% in that time. But over five years returns have been remarkably great. In fact, during that period, the share price climbed 598%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since the stock has added CN¥2.4b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for RoboTechnik Intelligent Technology

Given that RoboTechnik Intelligent Technology 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.

In the last 5 years RoboTechnik Intelligent Technology saw its revenue grow at 16% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 47%(per year) over the same period. Despite the strong run, top performers like RoboTechnik Intelligent Technology 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 how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, RoboTechnik Intelligent Technology's TSR for the last 5 years was 604%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that RoboTechnik Intelligent Technology shareholders have received a total shareholder return of 424% over the last year. Of course, that includes the dividend. That's better than the annualised return of 48% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with RoboTechnik Intelligent Technology , and understanding them should be part of your investment process.

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 Chinese 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.