The Long Time Technology (GTSM:6555) Share Price Has Gained 105%, So Why Not Pay It Some Attention?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Long Time Technology Co., Ltd. (GTSM:6555) share price has soared 105% return in just a single year. Shareholders are also celebrating an even better 169% rise, over the last three months. Having said that, the longer term returns aren't so impressive, with stock gaining just 25% in three years.

View our latest analysis for Long Time Technology

Long Time Technology wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Long Time Technology grew its revenue by 3.6% last year. That's not great considering the company is losing money. In contrast, the share price took off during the year, gaining 105%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

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

Take a more thorough look at Long Time Technology's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Long Time Technology shareholders have received a total shareholder return of 105% over the last year. There's no doubt those recent returns are much better than the TSR loss of 0.6% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Long Time Technology (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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