Buying shares in the best businesses can build meaningful wealth for you and your family. While the best companies are hard to find, but they can generate massive returns over long periods. Don't believe it? Then look at the Pertama Digital Berhad (KLSE:PERTAMA) share price. It's 865% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 34% in about a quarter. It really delights us to see such great share price performance for investors.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for Pertama Digital Berhad
Given that Pertama Digital Berhad 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.
In the last 5 years Pertama Digital Berhad saw its revenue shrink by 19% per year. So it's pretty surprising to see that the share price is up 57% per year. Obviously, whatever the market is excited about, it's not a track record of revenue growth. At the risk of upsetting holders, this does suggest that hope for a better future is playing a significant role in the share price action.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Pertama Digital Berhad's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Pertama Digital Berhad shareholders have received a total shareholder return of 132% over one year. That gain is better than the annual TSR over five years, which is 57%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Pertama Digital Berhad better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Pertama Digital Berhad (including 1 which can't be ignored) .