Did Business Growth Power Pegasus Heights Berhad's (KLSE:PHB) Share Price Gain of 300%?

Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Pegasus Heights Berhad (KLSE:PHB) share price has soared 300% return in just a single year. In the last week shares have slid back 20%. Zooming out, the stock is actually down 50% in the last three years.

View our latest analysis for Pegasus Heights Berhad

Because Pegasus Heights Berhad 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last twelve months, Pegasus Heights Berhad's revenue grew by 543%. That's stonking growth even when compared to other loss-making stocks. And the share price has responded, gaining 300% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's nice to see that Pegasus Heights Berhad shareholders have received a total shareholder return of 300% over the last year. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Pegasus Heights Berhad better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Pegasus Heights Berhad (of which 2 are a bit concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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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