Recent 11% pullback isn't enough to hurt long-term Vobile Group (HKG:3738) shareholders, they're still up 464% over 5 years

Vobile Group Limited (HKG:3738) shareholders might be concerned after seeing the share price drop 11% in the last week. But that does not change the realty that the stock's performance has been terrific, over five years. In that time, the share price has soared some 464% higher! So we don't think the recent decline in the share price means its story is a sad one. But the real question is whether the business fundamentals can improve over the long term. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 40% decline over the last three years: that's a long time to wait for profits.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

View our latest analysis for Vobile Group

While Vobile Group made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. 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.

For the last half decade, Vobile Group can boast revenue growth at a rate of 49% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 41%(per year) over the same period. Despite the strong run, top performers like Vobile Group have been known to go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Vobile Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Vobile Group shareholders have received a total shareholder return of 126% over the last year. That gain is better than the annual TSR over five years, which is 41%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Vobile Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for Vobile Group that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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