QuinStreet (NASDAQ:QNST) shareholders are still up 90% over 3 years despite pulling back 8.8% in the past week

One simple way to benefit from the stock market is to buy an index fund. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, QuinStreet, Inc. (NASDAQ:QNST) shareholders have seen the share price rise 90% over three years, well in excess of the market return (37%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 37% in the last year.

While the stock has fallen 8.8% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for QuinStreet

Because QuinStreet made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. 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.

In the last 3 years QuinStreet saw its revenue grow at 10% per year. That's a very respectable growth rate. The share price gain of 24% per year shows that the market is paying attention to this growth. If that's the case, then it could be well worth while to research the growth trajectory. Of course, it's always worth considering funding risks when a company isn't profitable.

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 QuinStreet's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that QuinStreet has rewarded shareholders with a total shareholder return of 37% in the last twelve months. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand QuinStreet better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for QuinStreet you should be aware of.

But note: QuinStreet 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 American 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.