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Kura Sushi USA, Inc. (NASDAQ:KRUS) shareholders might understandably be very concerned that the share price has dropped 58% in the last quarter. But that doesn't change the fact that the returns over the last five years have been very strong. It's fair to say most would be happy with 258% the gain in that time. We think it's more important to dwell on the long term returns than the short term returns. Only time will tell if there is still too much optimism currently reflected in the share price.
Although Kura Sushi USA has shed US$96m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Kura Sushi USA isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years Kura Sushi USA saw its revenue grow at 35% 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 29% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Kura Sushi USA seems like a high growth stock - so growth investors might want to add it to their watchlist.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
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. So it makes a lot of sense to check out what analysts think Kura Sushi USA will earn in the future (free profit forecasts) .
A Different Perspective
We regret to report that Kura Sushi USA shareholders are down 60% for the year. Unfortunately, that's worse than the broader market decline of 2.0%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 29% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. You could get a better understanding of Kura Sushi USA's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.