Recent 8.4% pullback isn't enough to hurt long-term GoFintech Innovation (HKG:290) shareholders, they're still up 789% over 1 year

GoFintech Innovation Limited (HKG:290) shareholders might understandably be very concerned that the share price has dropped 34% in the last quarter. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Few could complain about the impressive 352% rise, throughout the period. So the recent fall isn't enough to negate the good performance. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).

Although GoFintech Innovation has shed HK$522m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for GoFintech Innovation

GoFintech Innovation 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

GoFintech Innovation grew its revenue by 714% last year. That's well above most other pre-profit companies. But the share price seems headed to the moon, up 352% as previously highlighted. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between GoFintech Innovation's total shareholder return (TSR) and its share price change, which we've covered above. 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. GoFintech Innovation hasn't been paying dividends, but its TSR of 789% exceeds its share price return of 352%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

It's good to see that GoFintech Innovation has rewarded shareholders with a total shareholder return of 789% in the last twelve months. That's better than the annualised return of 21% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Even so, be aware that GoFintech Innovation is showing 1 warning sign in our investment analysis , you should know about...

GoFintech Innovation is not the only stock that insiders are buying. For those who like to find lesser know companies 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 Hong Kong 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.