Yahoo Finance Investors bid GSI Technology (NASDAQ:GSIT) up US$38m despite increasing losses YoY, taking one-year return to 168%
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the GSI Technology, Inc. (NASDAQ:GSIT) share price has soared 168% return in just a single year. It's also good to see the share price up 104% over the last quarter. Unfortunately the longer term returns are not so good, with the stock falling 30% in the last three years.
The past week has proven to be lucrative for GSI Technology investors, so let's see if fundamentals drove the company's one-year performance.
Check out our latest analysis for GSI Technology
GSI Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year GSI Technology saw its revenue shrink by 33%. So we would not have expected the share price to rise 168%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at GSI Technology's financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that GSI Technology has rewarded shareholders with a total shareholder return of 168% in the last twelve months. Notably the five-year annualised TSR loss of 7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with GSI Technology (including 2 which don't sit too well with us) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
