Investors bid Enlight (TWSE:2438) up NT$283m despite increasing losses YoY, taking five-year CAGR to 23%

Some Enlight Corporation (TWSE:2438) shareholders are probably rather concerned to see the share price fall 31% over the last three months. But in stark contrast, the returns over the last half decade have impressed. It's fair to say most would be happy with 185% the gain in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Only time will tell if there is still too much optimism currently reflected in the share price.

Since the stock has added NT$283m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Enlight

Given that Enlight didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last half decade Enlight's revenue has actually been trending down at about 21% per year. Given that scenario, we wouldn't have expected the share price to rise 23% per year, but that's what it did. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, we are a bit cautious in this kind of situation.

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

If you are thinking of buying or selling Enlight stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Enlight shareholders have received returns of 28% over twelve months, which isn't far from the general market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 23%. It is possible that management foresight will bring growth well into the future, even if the share price slows down. 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. Even so, be aware that Enlight is showing 3 warning signs in our investment analysis , and 1 of those is significant...

Of course Enlight 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 Taiwanese 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.