If You Had Bought Holy Stone Healthcare (GTSM:4194) Shares A Year Ago You'd Have Earned 108% Returns

The last three months have been tough on Holy Stone Healthcare Co., Ltd. (GTSM:4194) shareholders, who have seen the share price decline a rather worrying 31%. But that doesn't detract from the splendid returns of the last year. We're very pleased to report the share price shot up 108% in that time. So it may be that the share price is simply cooling off after a strong rise. More important, going forward, is how the business itself is going.

View our latest analysis for Holy Stone Healthcare

Holy Stone Healthcare 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. 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 Holy Stone Healthcare saw its revenue grow by 8.5%. That's not great considering the company is losing money. In contrast, the share price took off during the year, gaining 108%. 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.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

It's good to see that Holy Stone Healthcare has rewarded shareholders with a total shareholder return of 108% in the last twelve months. Notably the five-year annualised TSR loss of 7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Case in point: We've spotted 2 warning signs for Holy Stone Healthcare you should be aware of.

But note: Holy Stone Healthcare 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 TW exchanges.

When trading Holy Stone Healthcare or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.