Knowledge Economic City (TADAWUL:4310) ascends 4.3% this week, taking five-year gains to 63%

Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. To wit, the Knowledge Economic City share price has climbed 63% in five years, easily topping the market return of 33% (ignoring dividends).

Since it's been a strong week for Knowledge Economic City shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Knowledge Economic City

Because Knowledge Economic City 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Knowledge Economic City saw its revenue shrink by 26% per year. Even though revenue hasn't increased, the stock actually gained 10%, per year, during the same period. To us that suggests that there probably isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

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

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

A Different Perspective

Although it hurts that Knowledge Economic City returned a loss of 1.6% in the last twelve months, the broader market was actually worse, returning a loss of 6.1%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 10% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. 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. Even so, be aware that Knowledge Economic City is showing 2 warning signs in our investment analysis , you should know about...

Of course Knowledge Economic City 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 Saudi exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.