Reflecting on Seoul Auction's (KOSDAQ:063170) Share Price Returns Over The Last Five Years

Seoul Auction Co., Ltd. (KOSDAQ:063170) shareholders will doubtless be very grateful to see the share price up 59% in the last quarter. But don't envy holders -- looking back over 5 years the returns have been really bad. In that time the share price has delivered a rude shock to holders, who find themselves down 64% after a long stretch. So we're not so sure if the recent bounce should be celebrated. But it could be that the fall was overdone.

Check out our latest analysis for Seoul Auction

Given that Seoul Auction didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years Seoul Auction saw its revenue shrink by 4.2% per year. That's not what investors generally want to see. The share price decline of 10% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.

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 Seoul Auction's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Seoul Auction shareholders gained a total return of 29% during the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 10% endured over half a decade. It could well be that the business is stabilizing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Seoul Auction (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.

Of course Seoul Auction may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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