Loss-making GSI Technology (NASDAQ:GSIT) sheds a further US$27m, taking total shareholder losses to 30% over 5 years

It is a pleasure to report that the GSI Technology, Inc. (NASDAQ:GSIT) is up 225% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. In fact, the share price is down 30%, which falls well short of the return you could get by buying an index fund.

If the past week is anything to go by, investor sentiment for GSI Technology isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for GSI Technology

Given that GSI Technology 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over half a decade GSI Technology reduced its trailing twelve month revenue by 11% for each year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 5% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

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

It's nice to see that GSI Technology shareholders have received a total shareholder return of 22% over the last year. Notably the five-year annualised TSR loss of 5% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that GSI Technology is showing 3 warning signs in our investment analysis , and 2 of those are concerning...

We will like GSI Technology 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 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.