If You Had Bought 5paisa Capital (NSE:5PAISA) Shares A Year Ago You'd Have Earned 94% Returns

By
Simply Wall St
Published
October 28, 2020

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the 5paisa Capital Limited (NSE:5PAISA) share price is up 94% in the last year, clearly besting the market return of around 0.2% (not including dividends). So that should have shareholders smiling. We'll need to follow 5paisa Capital for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for 5paisa Capital

While 5paisa Capital made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year 5paisa Capital saw its revenue grow by 82%. That's stonking growth even when compared to other loss-making stocks. While the share price gain of 94% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at 5paisa Capital. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

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

NSEI:5PAISA Earnings and Revenue Growth October 29th 2020

Take a more thorough look at 5paisa Capital's financial health with this free report on its balance sheet.

A Different Perspective

5paisa Capital shareholders should be happy with the total gain of 94% over the last twelve months. We regret to report that the share price is down 6.6% over ninety days. Shorter term share price moves often don't signify much about the business itself. 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. For instance, we've identified 2 warning signs for 5paisa Capital that you should be aware of.

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 IN exchanges.

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This article by Simply Wall St is general in nature. 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.
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