Should AIIT ONE (KOSDAQ:230980) Be Disappointed With Their 74% Profit?

By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. For example, AIIT ONE Co., Ltd. (KOSDAQ:230980) shareholders have seen the share price rise 74% over three years, well in excess of the market return (22%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 23%.

View our latest analysis for AIIT ONE

AIIT ONE isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years AIIT ONE saw its revenue shrink by 20% per year. Despite the lack of revenue growth, the stock has returned 20%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling AIIT ONE stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

AIIT ONE shareholders are up 23% for the year. It's always nice to make money but this return falls short of the market return which was about 90% for the year. On the bright side that gain is actually better than the average return of 20% over the last three years, implying that the company is doing better recently. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. It's always interesting to track share price performance over the longer term. But to understand AIIT ONE better, we need to consider many other factors. Take risks, for example - AIIT ONE has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on KR exchanges.

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This article by Simply Wall St is general in nature. 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.
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