By buying an index fund, investors can approximate the average market return. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, the Cashway Fintech Co.,Ltd. (SHSE:603106) share price is up 51% in the last three years, clearly besting the market decline of around 18% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 18% in the last year.

Since the long term performance has been good but there's been a recent pullback of 9.6%, let's check if the fundamentals match the share price.

Given that Cashway FintechLtd didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

Cashway FintechLtd actually saw its revenue drop by 23% per year over three years. Despite the lack of revenue growth, the stock has returned 15%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

If you are thinking of buying or selling Cashway FintechLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Cashway FintechLtd shareholders have received a total shareholder return of 18% over the last year. That gain is better than the annual TSR over five years, which is 5%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Take risks, for example - Cashway FintechLtd has 2 warning signs we think you should be aware of.

But note: Cashway FintechLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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