Paru (KOSDAQ:043200) shareholder returns have been splendid, earning 164% in 1 year

Unless you borrow money to invest, the potential losses are limited. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Paru Co., Ltd (KOSDAQ:043200) share price had more than doubled in just one year - up 164%. It's up an even more impressive 231% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. It is also impressive that the stock is up 40% over three years, adding to the sense that it is a real winner.

Since the stock has added ₩14b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Paru isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Paru actually shrunk its revenue over the last year, with a reduction of 24%. We're a little surprised to see the share price pop 164% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

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

Take a more thorough look at Paru's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Paru has rewarded shareholders with a total shareholder return of 164% in the last twelve months. Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance. 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 Paru better, we need to consider many other factors. Even so, be aware that Paru is showing 2 warning signs in our investment analysis , and 1 of those is significant...

But note: Paru may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.