Can You Imagine How Elated Parlo Berhad's (KLSE:PARLO) Shareholders Feel About Its 329% Share Price Gain?

While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you find (and hold) a big winner, you can markedly improve your finances. In the case of Parlo Berhad (KLSE:PARLO), the share price is up an incredible 329% in the last year alone. It's also good to see the share price up 243% over the last quarter. Parlo Berhad hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Parlo Berhad

Parlo Berhad isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Parlo Berhad actually shrunk its revenue over the last year, with a reduction of 39%. So it's very confusing to see that the share price gained a whopping 329%. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. To us, a gain like this looks like speculation, but there might be historical trends to back it up.

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

This free interactive report on Parlo Berhad's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Parlo Berhad shareholders should be happy with the total gain of 329% over the last twelve months. And the share price momentum remains respectable, with a gain of 243% in the last three months. This suggests the company is continuing to win over new investors. 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 4 warning signs with Parlo Berhad (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on MY 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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