Recent 26% pullback isn't enough to hurt long-term Motorcar Parts of America (NASDAQ:MPAA) shareholders, they're still up 118% over 1 year

Motorcar Parts of America, Inc. (NASDAQ:MPAA) shareholders might be concerned after seeing the share price drop 26% in the last week. But that doesn't detract from the splendid returns of the last year. We're very pleased to report the share price shot up 118% in that time. So it is important to view the recent reduction in price through that lense. More important, going forward, is how the business itself is going.

Since the long term performance has been good but there's been a recent pullback of 26%, let's check if the fundamentals match the share price.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

We don't think that Motorcar Parts of America's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last twelve months, Motorcar Parts of America's revenue grew by 6.6%. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 118%. The business will need a lot more growth to justify that increase. 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).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Motorcar Parts of America stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that Motorcar Parts of America shareholders have received a total shareholder return of 118% over the last year. That certainly beats the loss of about 6% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Motorcar Parts of America better, we need to consider many other factors. For instance, we've identified 2 warning signs for Motorcar Parts of America (1 is a bit concerning) that you should be aware of.

Motorcar Parts of America is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

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

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

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.