Recent 19% pullback isn't enough to hurt long-term Yield Go Holdings (HKG:1796) shareholders, they're still up 106% over 1 year

By
Simply Wall St
Published
May 14, 2022
SEHK:1796
Source: Shutterstock

Yield Go Holdings Ltd. (HKG:1796) shareholders might be concerned after seeing the share price drop 19% in the last week. But that doesn't detract from the splendid returns of the last year. Indeed, the share price is up an impressive 106% in that time. So it is important to view the recent reduction in price through that lense. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.

In light of the stock dropping 19% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

View our latest analysis for Yield Go Holdings

Given that Yield Go Holdings 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Yield Go Holdings actually shrunk its revenue over the last year, with a reduction of 29%. So we would not have expected the share price to rise 106%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

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

earnings-and-revenue-growth
SEHK:1796 Earnings and Revenue Growth May 14th 2022

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Yield Go Holdings' earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Yield Go Holdings rewarded shareholders with a total shareholder return of 106% over the last year. That gain actually surpasses the 17% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For instance, we've identified 2 warning signs for Yield Go Holdings (1 is a bit unpleasant) that you should be aware of.

But note: Yield Go Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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