Does exax's (KOSDAQ:060230) Share Price Gain of 27% Match Its Business Performance?

By buying an index fund, you can roughly match the market return with ease. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, exax Inc. (KOSDAQ:060230) shareholders have seen the share price rise 27% over three years, well in excess of the market return (9.9%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 15%.

View our latest analysis for exax

Because exax made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

exax actually saw its revenue drop by 11% per year over three years. The revenue growth might be lacking but the share price has gained 8% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

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

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

A Different Perspective

exax provided a TSR of 15% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 0.5% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand exax better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for exax you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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