Did You Miss Next Entertainment World's (KOSDAQ:160550) 94% Share Price Gain?

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the Next Entertainment World Co., Ltd. (KOSDAQ:160550) share price is up 94% in the last year, clearly besting the market return of around 42% (not including dividends). That's a solid performance by our standards! However, the longer term returns haven't been so impressive, with the stock up just 7.9% in the last three years.

View our latest analysis for Next Entertainment World

Next Entertainment World wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, Next Entertainment World's revenue grew by 18%. That's a fairly respectable growth rate. While the share price performed well, gaining 94% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that Next Entertainment World shareholders have received a total shareholder return of 94% over one year. There's no doubt those recent returns are much better than the TSR loss of 3% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Next Entertainment World better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Next Entertainment World you should be aware of, and 1 of them is a bit unpleasant.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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