Even after rising 10% this past week, RaQualia Pharma (TSE:4579) shareholders are still down 58% over the past three years

It's nice to see the RaQualia Pharma Inc. (TSE:4579) share price up 10% in a week. Meanwhile over the last three years the stock has dropped hard. In that time, the share price dropped 58%. So the improvement may be a real relief to some. After all, could be that the fall was overdone.

While the stock has risen 10% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

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RaQualia Pharma 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over three years, RaQualia Pharma grew revenue at 2.7% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 16% for the last three years. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). After all, growing a business isn't easy, and the process will not always be smooth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on RaQualia Pharma's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

RaQualia Pharma shareholders are up 24% for the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 8% per year, over five years. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand RaQualia Pharma better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for RaQualia Pharma you should be aware of, and 1 of them is significant.

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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.