SM Culture & Contents (KOSDAQ:048550) shareholders are up 11% this past week, but still in the red over the last three years

SM Culture & Contents Co., Ltd. (KOSDAQ:048550) shareholders should be happy to see the share price up 14% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 36% in the last three years, falling well short of the market return.

While the last three years has been tough for SM Culture & Contents shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for SM Culture & Contents

Because SM Culture & Contents 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 hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, SM Culture & Contents saw its revenue grow by 2.2% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. The stock dropped 11% during that time. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on SM Culture & Contents' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

SM Culture & Contents shareholders are down 31% for the year, but the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand SM Culture & Contents better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with SM Culture & Contents (including 1 which is potentially serious) .

But note: SM Culture & Contents may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com