Shareholders have faith in loss-making Prime Focus (NSE:PFOCUS) as stock climbs 3.4% in past week, taking five-year gain to 375%

Buying shares in the best businesses can build meaningful wealth for you and your family. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the Prime Focus Limited (NSE:PFOCUS) share price. It's 375% higher than it was five years ago. And this is just one example of the epic gains achieved by some long term investors. It's also good to see the share price up 16% over the last quarter.

Since it's been a strong week for Prime Focus shareholders, let's have a look at trend of the longer term fundamentals.

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Prime Focus 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. When a company doesn't make profits, we'd generally hope to see good 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.

In the last 5 years Prime Focus saw its revenue grow at 8.1% per year. That's a fairly respectable growth rate. Arguably it's more than reflected in the very strong share price gain of 37% a year over a half a decade. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.

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

If you are thinking of buying or selling Prime Focus stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Prime Focus shareholders have received a total shareholder return of 40% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 37% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Prime Focus better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Prime Focus you should be aware of, and 2 of them are a bit unpleasant.

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.

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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.