GSI Technology (NASDAQ:GSIT) adds US$7.8m to market cap in the past 7 days, though investors from five years ago are still down 60%

While it may not be enough for some shareholders, we think it is good to see the GSI Technology, Inc. (NASDAQ:GSIT) share price up 12% in a single quarter. But that doesn't change the fact that the returns over the last half decade have been disappointing. In fact, the share price has declined rather badly, down some 60% in that time. Some might say the recent bounce is to be expected after such a bad drop. We'd err towards caution given the long term under-performance.

Although the past week has been more reassuring for shareholders, they're still in the red over the last five years, so let's see if the underlying business has been responsible for the decline.

See our latest analysis for GSI Technology

Because GSI Technology 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade GSI Technology reduced its trailing twelve month revenue by 15% for each year. That's definitely a weaker result than most pre-profit companies report. It seems appropriate, then, that the share price slid about 10% annually during that time. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us.

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

If you are thinking of buying or selling GSI Technology stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

GSI Technology shareholders are up 29% for the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 10% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand GSI Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for GSI Technology (of which 2 make us uncomfortable!) you should know about.

Of course GSI Technology may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.