Is Wysiwyg Studios' (KOSDAQ:299900) 171% Share Price Increase Well Justified?

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Wysiwyg Studios Co., Ltd. (KOSDAQ:299900) share price has soared 171% return in just a single year. It's also good to see the share price up 82% over the last quarter. Wysiwyg Studios hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Wysiwyg Studios

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last twelve months Wysiwyg Studios went from profitable to unprofitable. While this may prove temporary, we'd consider it a negative, so we would not have expected to see the share price up. It may be that the company has done well on other metrics.

We think that the revenue growth of 142% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

It's nice to see that Wysiwyg Studios shareholders have gained 171% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 82% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Wysiwyg Studios , and understanding them should be part of your investment process.

We will like Wysiwyg Studios better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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