Recent 11% pullback isn't enough to hurt long-term Cuscapi Berhad (KLSE:CUSCAPI) shareholders, they're still up 155% over 1 year

By
Simply Wall St
Published
December 01, 2021
KLSE:CUSCAPI
Source: Shutterstock

It hasn't been the best quarter for Cuscapi Berhad (KLSE:CUSCAPI) shareholders, since the share price has fallen 16% in that time. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 155%. So it may be that the share price is simply cooling off after a strong rise. The real question is whether the business is trending in the right direction.

Although Cuscapi Berhad has shed RM26m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Cuscapi Berhad

Because Cuscapi 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Cuscapi Berhad saw its revenue shrink by 41%. So we would not have expected the share price to rise 155%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

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

earnings-and-revenue-growth
KLSE:CUSCAPI Earnings and Revenue Growth December 2nd 2021

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

A Different Perspective

It's good to see that Cuscapi Berhad has rewarded shareholders with a total shareholder return of 155% in the last twelve months. That's better than the annualised return of 17% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Cuscapi Berhad has 3 warning signs we think you should be aware of.

We will like Cuscapi Berhad 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 MY exchanges.

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