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It might be of some concern to shareholders to see the FingerMotion, Inc. (NASDAQ:FNGR) share price down 24% in the last month. But that scarcely detracts from the really solid long term returns generated by the company over five years. It's fair to say most would be happy with 118% the gain in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. The more important question is whether the stock is too cheap or too expensive today.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for FingerMotion
FingerMotion wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, FingerMotion can boast revenue growth at a rate of 47% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 17% per year, in that time. So it seems likely that buyers have paid attention to the strong revenue growth. FingerMotion seems like a high growth stock - so growth investors might want to add it to their watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling FingerMotion stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While the broader market gained around 13% in the last year, FingerMotion shareholders lost 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 17%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand FingerMotion better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for FingerMotion you should be aware of, and 3 of them don't sit too well with us.