FCS Software Solutions (NSE:FCSSOFT) shareholder returns have been incredible, earning 415% in 5 years

Long term investing can be life changing when you buy and hold the truly great businesses. And highest quality companies can see their share prices grow by huge amounts. Don't believe it? Then look at the FCS Software Solutions Limited (NSE:FCSSOFT) share price. It's 415% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will. It's even up 13% in the last week.

Since the stock has added ₹547m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that FCS Software Solutions only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, FCS Software Solutions can boast revenue growth at a rate of 0.6% per year. That's not a very high growth rate considering the bottom line. So shareholders should be pretty elated with the 39% increase per year, in that time. We don't think the growth over the period is that great, but it could be that faster growth appears to some to be on the horizon. Having said that, a closer look at the numbers might surface good reasons to believe that profits will gush in the future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at FCS Software Solutions' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 3.0% in the last year, FCS Software Solutions shareholders lost 32%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 39%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand FCS Software Solutions better, we need to consider many other factors. Even so, be aware that FCS Software Solutions is showing 2 warning signs in our investment analysis , you should know about...

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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 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.