Panache Digilife's (NSE:PANACHE) 60% CAGR outpaced the company's earnings growth over the same five-year period

We think all investors should try to buy and hold high quality multi-year winners. And we've seen some truly amazing gains over the years. For example, the Panache Digilife Limited (NSE:PANACHE) share price is up a whopping 959% in the last half decade, a handsome return for long term holders. 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 72% over the last quarter. We love happy stories like this one. The company should be really proud of that performance!

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

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We don't think that Panache Digilife's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. 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 5 years Panache Digilife saw its revenue grow at 9.4% per year. That's a fairly respectable growth rate. Arguably it's more than reflected in the very strong share price gain of 60% a year over a half a decade. We usually like strong growth stocks but it does seem the market already appreciates this one quite well!

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

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

A Different Perspective

It's good to see that Panache Digilife has rewarded shareholders with a total shareholder return of 174% in the last twelve months. That gain is better than the annual TSR over five years, which is 60%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Panache Digilife , and understanding them should be part of your investment process.

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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.