Recent 11% pullback isn't enough to hurt long-term Worldgate Global Logistics (HKG:8292) shareholders, they're still up 576% over 1 year

It might be of some concern to shareholders to see the Worldgate Global Logistics Ltd (HKG:8292) share price down 17% in the last month. But that isn't a problem when you consider how the share price has soared over the last year. In fact, it is up 576% in that time. So it is not that surprising to see the stock retrace a little. The real question is whether the fundamental business performance can justify the strong increase over the long term. Anyone who held for that rewarding ride would probably be keen to talk about it.

While the stock has fallen 11% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

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Given that Worldgate Global Logistics 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 desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Worldgate Global Logistics saw its revenue grow by 3.5%. That's not a very high growth rate considering it doesn't make profits. So it's truly surprising that the share price rocketed 576% in a single year. We're happy that investors have made money, but we can't help questioning whether the rise is sustainable. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Worldgate Global Logistics' earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Worldgate Global Logistics shareholders have received a total shareholder return of 576% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Worldgate Global Logistics better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Worldgate Global Logistics you should be aware of, and 2 of them are concerning.

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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.