NavInfo Co., Ltd. (SZSE:002405) shareholders will doubtless be very grateful to see the share price up 45% in the last quarter. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 33% in the last three years, falling well short of the market return.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

Because NavInfo made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 three years, NavInfo saw its revenue grow by 4.4% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. The stock dropped 10% during that time. If revenue growth accelerates, we might see the share price bounce. But the real upside for shareholders will be if the company can start generating profits.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on NavInfo's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

NavInfo shareholders gained a total return of 7.6% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 6% per year, over five years. It could well be that the business is stabilizing. 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 - NavInfo has 1 warning sign we think you should be aware of.

Of course NavInfo may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.