The 5.0% return this week takes MakeMyTrip's (NASDAQ:MMYT) shareholders one-year gains to 157%
When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the MakeMyTrip Limited (NASDAQ:MMYT) share price has soared 157% return in just a single year. On top of that, the share price is up 36% in about a quarter. Looking back further, the stock price is 65% higher than it was three years ago.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
See our latest analysis for MakeMyTrip
Given that MakeMyTrip only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Over the last twelve months, MakeMyTrip's revenue grew by 37%. We respect that sort of growth, no doubt. While that revenue growth is pretty good the share price performance outshone it, with a lift of 157% as mentioned above. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that MakeMyTrip has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at MakeMyTrip's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that MakeMyTrip shareholders have received a total shareholder return of 157% over the last year. That's better than the annualised return of 18% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. To that end, you should be aware of the 1 warning sign we've spotted with MakeMyTrip .
We will like MakeMyTrip better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
