Micro Digital (KOSDAQ:305090) delivers shareholders impressive 21% CAGR over 5 years, surging 20% in the last week alone

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is Micro Digital Co., Ltd. (KOSDAQ:305090) which saw its share price drive 163% higher over five years. Better yet, the share price has risen 20% in the last week.

The past week has proven to be lucrative for Micro Digital investors, so let's see if fundamentals drove the company's five-year performance.

Our free stock report includes 1 warning sign investors should be aware of before investing in Micro Digital. Read for free now.

Given that Micro Digital only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, Micro Digital can boast revenue growth at a rate of 29% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 21% per year, in that time. So it seems likely that buyers have paid attention to the strong revenue growth. Micro Digital seems like a high growth stock - so growth investors might want to add it to their watchlist.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Micro Digital's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Micro Digital has rewarded shareholders with a total shareholder return of 45% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 21% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Micro Digital better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Micro Digital you should be aware of.

Of course Micro Digital 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 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.