Shareholders have faith in loss-making Enlight (TWSE:2438) as stock climbs 13% in past week, taking five-year gain to 403%

Some Enlight Corporation (TWSE:2438) shareholders are probably rather concerned to see the share price fall 33% over the last three months. But that does not change the realty that the stock's performance has been terrific, over five years. Indeed, the share price is up a whopping 403% in that time. Arguably, the recent fall is to be expected after such a strong rise. But the real question is whether the business fundamentals can improve over the long term.

Since the stock has added NT$337m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last 5 years Enlight saw its revenue shrink by 22% per year. So it's pretty surprising to see that the share price is up 38% per year. Obviously, whatever the market is excited about, it's not a track record of revenue growth. I think it's fair to say there is probably a fair bit of excitement in the price.

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

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

A Different Perspective

It's nice to see that Enlight shareholders have received a total shareholder return of 99% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 38% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Enlight (of which 3 are concerning!) you should know about.

But note: Enlight may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.