Even though Repro India (NSE:REPRO) has lost ₹1.2b market cap in last 7 days, shareholders are still up 40% over 5 years

The Repro India Limited (NSE:REPRO) share price has had a bad week, falling 15%. But the silver lining is the stock is up over five years. Unfortunately its return of 40% is below the market return of 152%.

In light of the stock dropping 15% 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 five-year return.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Repro India 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 desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Repro India can boast revenue growth at a rate of 20% per year. That's well above most pre-profit companies. While long-term shareholders have made money, the 7% per year gain over five years fall short of the market return. You could argue the market is still pretty skeptical, given the growing revenues. Arguably this falls in a potential sweet spot - modest share price gains but good top line growth over the long term justifies investigation, in our book.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Repro India's financial health with this free report on its balance sheet.

A Different Perspective

Investors in Repro India had a tough year, with a total loss of 6.2%, against a market gain of about 6.4%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 7% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Repro India better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Repro India you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.