Even though Kura Sushi USA (NASDAQ:KRUS) has lost US$57m market cap in last 7 days, shareholders are still up 58% over 1 year

By
Simply Wall St
Published
February 24, 2022
NasdaqGM:KRUS
Source: Shutterstock

Kura Sushi USA, Inc. (NASDAQ:KRUS) shareholders might be concerned after seeing the share price drop 28% in the last quarter. But that doesn't change the reality that over twelve months the stock has done really well. To wit, it had solidly beat the market, up 58%.

In light of the stock dropping 11% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

Check out our latest analysis for Kura Sushi USA

Given that Kura Sushi USA 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. 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.

Over the last twelve months, Kura Sushi USA's revenue grew by 130%. That's stonking growth even when compared to other loss-making stocks. While the share price gain of 58% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Kura Sushi USA. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
NasdaqGM:KRUS Earnings and Revenue Growth February 24th 2022

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think Kura Sushi USA will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that Kura Sushi USA shareholders have gained 58% over the last year. Unfortunately the share price is down 28% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It's always interesting to track share price performance over the longer term. But to understand Kura Sushi USA better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Kura Sushi USA , and understanding them should be part of your investment process.

We will like Kura Sushi USA better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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