DRTECH (KOSDAQ:214680) shareholders are still up 33% over 3 years despite pulling back 10% in the past week

DRTECH Corporation (KOSDAQ:214680) shareholders might be concerned after seeing the share price drop 10% in the last week. In contrast the stock is up over the last three years. Arguably you'd have been better off buying an index fund, because the gain of 33% in three years isn't amazing.

While the stock has fallen 10% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

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DRTECH isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years DRTECH saw its revenue grow at 8.5% per year. That's a very respectable growth rate. The stock is up 10% per year over three years, which isn't bad, but is nothing to write home about. So it's possible that expectations were elevated in the past, muting returns over three years. Of course, if the company can tread the path to profitability, then the current price might be too pessimistic.

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

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

A Different Perspective

DRTECH shareholders are down 25% for the year, but the market itself is up 61%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand DRTECH better, we need to consider many other factors. For instance, we've identified 2 warning signs for DRTECH (1 is a bit unpleasant) that you should be aware of.

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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.