Despite currently being unprofitable, Edge FoundryLtd (KOSDAQ:105550) has delivered a 99% return to shareholders over 5 years

Edge Foundry Co.,Ltd (KOSDAQ:105550) shareholders might be concerned after seeing the share price drop 18% in the last month. Looking further back, the stock has generated good profits over five years. It has returned a market beating 99% in that time.

Although Edge FoundryLtd has shed ₩49b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Edge FoundryLtd 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. 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.

For the last half decade, Edge FoundryLtd can boast revenue growth at a rate of 2.8% per year. Put simply, that growth rate fails to impress. The modest growth is probably broadly reflected in the share price, which is up 15%, per year over 5 years. The business could be one worth watching but we generally prefer faster revenue growth.

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

We're pleased to report that Edge FoundryLtd shareholders have received a total shareholder return of 76% over one year. That gain is better than the annual TSR over five years, which is 15%. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Edge FoundryLtd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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 South Korean 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.