NEXUS (KOSDAQ:205500) delivers shareholders stellar 150% return over 1 year, surging 20% in the last week alone

NEXUS Co., Ltd. (KOSDAQ:205500) shareholders might be concerned after seeing the share price drop 18% in the last quarter. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 150% in that time. So it is important to view the recent reduction in price through that lense. Only time will tell if there is still too much optimism currently reflected in the share price.

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

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Given that NEXUS didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

NEXUS grew its revenue by 443% last year. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 150% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

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

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

A Different Perspective

It's good to see that NEXUS has rewarded shareholders with a total shareholder return of 150% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with NEXUS (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

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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.