Investing in Kitahama Capital PartnersLtd (TSE:2134) three years ago would have delivered you a 80% gain

Some Kitahama Capital Partners Co.,Ltd. (TSE:2134) shareholders are probably rather concerned to see the share price fall 37% over the last three months. In contrast the stock has done reasonably well over three years. In that time the stock gained 80%, besting the market return of 75%.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

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Given that Kitahama Capital PartnersLtd didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last 3 years Kitahama Capital PartnersLtd saw its revenue grow at 17% per year. That's a very respectable growth rate. While the share price has done well, compounding at 22% yearly, over three years, that move doesn't seem over the top. If that's the case, then it could be well worth while to research the growth trajectory. Of course, it's always worth considering funding risks when a company isn't profitable.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's nice to see that Kitahama Capital PartnersLtd shareholders have received a total shareholder return of 80% over the last year. That certainly beats the loss of about 6% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Kitahama Capital PartnersLtd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Kitahama Capital PartnersLtd you should be aware of, and 2 of them are a bit unpleasant.

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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 Japanese 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.