The 12% return this week takes Polaris AI's (KOSDAQ:039980) shareholders one-year gains to 134%

Polaris AI Corp. (KOSDAQ:039980) shareholders might be concerned after seeing the share price drop 20% in the last month. But that doesn't change the fact that the returns over the last year have been very strong. We're very pleased to report the share price shot up 134% in that time. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.

Since the stock has added ₩15b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Polaris AI

We don't think that Polaris AI's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year Polaris AI saw its revenue shrink by 26%. So we would not have expected the share price to rise 134%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Polaris AI stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Polaris AI has rewarded shareholders with a total shareholder return of 134% in the last twelve months. That gain is better than the annual TSR over five years, which is 5%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Polaris AI (of which 3 are potentially serious!) you should know about.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

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

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.