As GaeaSoft (KOSDAQ:051160) rallies 13% this past week, investors may now be noticing the company's three-year earnings growth

GaeaSoft Corp. (KOSDAQ:051160) shareholders should be happy to see the share price up 13% in the last week. Meanwhile over the last three years the stock has dropped hard. Indeed, the share price is down a tragic 56% in the last three years. So it is really good to see an improvement. Perhaps the company has turned over a new leaf.

While the stock has risen 13% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for GaeaSoft

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

GaeaSoft became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.

We note that, in three years, revenue has actually grown at a 21% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating GaeaSoft further; while we may be missing something on this analysis, there might also be an opportunity.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

It's good to see that GaeaSoft has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That's better than the annualised return of 2% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand GaeaSoft better, we need to consider many other factors. For example, we've discovered 1 warning sign for GaeaSoft that you should be aware of before investing here.

We will like GaeaSoft 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 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.