What Type Of Returns Would sTraffic co.Ltd's(KOSDAQ:234300) Shareholders Have Earned If They Purchased Their SharesThree Years Ago?

sTraffic co,.Ltd. (KOSDAQ:234300) shareholders should be happy to see the share price up 17% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. Truth be told the share price declined 49% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

View our latest analysis for sTraffic co.Ltd

Because sTraffic co.Ltd made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years, sTraffic co.Ltd saw its revenue grow by 7.4% per year, compound. That's not a very high growth rate considering it doesn't make profits. Indeed, the stock dropped 14% over the last three years. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability.

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

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

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between sTraffic co.Ltd's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that sTraffic co.Ltd's TSR, at -44% is higher than its share price return of -49%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

sTraffic co.Ltd shareholders are up 36% for the year. Unfortunately this falls short of the market return of around 47%. On the bright side, that's certainly better than the yearly loss of about 13% endured over the last three years, implying that the company is doing better recently. We hope the turnaround in fortunes continues. It's always interesting to track share price performance over the longer term. But to understand sTraffic co.Ltd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for sTraffic co.Ltd you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course sTraffic co.Ltd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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