Can You Imagine How Rapid Synergy Berhad's (KLSE:RAPID) Shareholders Feel About The 15% Share Price Increase?

One simple way to benefit from the stock market is to buy an index fund. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Rapid Synergy Berhad (KLSE:RAPID) share price is up 15% in the last three years, clearly besting the market decline of around 5.8% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 11% in the last year.

See our latest analysis for Rapid Synergy Berhad

While Rapid Synergy Berhad made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Rapid Synergy Berhad actually saw its revenue drop by 6.2% per year over three years. Despite the lack of revenue growth, the stock has returned 5%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.

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

Take a more thorough look at Rapid Synergy Berhad's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Rapid Synergy Berhad has rewarded shareholders with a total shareholder return of 11% in the last twelve months. That gain is better than the annual TSR over five years, which is 1.7%. 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. It's always interesting to track share price performance over the longer term. But to understand Rapid Synergy Berhad better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Rapid Synergy Berhad (of which 1 is significant!) you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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