Over the last month the ZMFY Automobile Glass Services Limited (HKG:8135) has been much stronger than before, rebounding by 46%. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. In that time the share price has delivered a rude shock to holders, who find themselves down 53% after a long stretch. So is the recent increase sufficient to restore confidence in the stock? Not yet. However, in the best case scenario (far from fait accompli), this improved performance might be sustained.
Check out our latest analysis for ZMFY Automobile Glass Services
ZMFY Automobile Glass Services 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.
In the last half decade, ZMFY Automobile Glass Services saw its revenue increase by 4.1% per year. That's not a very high growth rate considering it doesn't make profits. This lacklustre growth has no doubt fueled the loss of 14% per year, in that time. We want to see an acceleration of revenue growth (or profits) before showing much interest in this one. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.
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. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of ZMFY Automobile Glass Services's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that ZMFY Automobile Glass Services shareholders have received a total shareholder return of 6.4% over the last year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. Take risks, for example - ZMFY Automobile Glass Services has 4 warning signs we think you should be aware of.