Investors might be losing patience for Quantum SolutionsLtd's (TSE:2338) increasing losses, as stock sheds 29% over the past week

Quantum Solutions Co.,Ltd. (TSE:2338) shareholders might be concerned after seeing the share price drop 29% in the last week. But that doesn't undermine the fantastic longer term performance (measured over five years). In fact, during that period, the share price climbed 564%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price. Anyone who held for that rewarding ride would probably be keen to talk about it.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

Check out our latest analysis for Quantum SolutionsLtd

Because Quantum SolutionsLtd made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 5 years Quantum SolutionsLtd saw its revenue grow at 2.5% per year. Put simply, that growth rate fails to impress. So shareholders should be pretty elated with the 46% increase per year, in that time. We'll tip our hats to that, any day, but the top-line growth isn't particularly impressive when you compare it to other pre-profit companies. It's not immediately obvious to us why the market has been so enthusiastic about the stock, but a more detailed look at revenue and profit trends might reveal why shareholders are optimistic.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

It's good to see that Quantum SolutionsLtd has rewarded shareholders with a total shareholder return of 24% in the last twelve months. However, that falls short of the 46% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand Quantum SolutionsLtd better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Quantum SolutionsLtd (including 3 which are potentially serious) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.