TradeGo FinTech's (HKG:8017) earnings growth rate lags the 997% return delivered to shareholders

It's been a soft week for TradeGo FinTech Limited (HKG:8017) shares, which are down 15%. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Few could complain about the impressive 997% rise, throughout the period. So it is not that surprising to see the stock retrace a little. While winners often keep winning, it can pay to be cautious after a strong rise. Anyone who held for that rewarding ride would probably be keen to talk about it.

Although TradeGo FinTech has shed HK$234m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

TradeGo FinTech boasted truly magnificent EPS growth in the last year. This remarkable growth rate may not be sustainable, but it is still impressive. We are not surprised the share price is up. Strong growth like this can be evidence of a fundamental inflection point in the business, making it a good time to investigate the stock more closely.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that TradeGo FinTech has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on TradeGo FinTech's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that TradeGo FinTech shareholders have received a total shareholder return of 997% over the last year. That's better than the annualised return of 55% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Case in point: We've spotted 2 warning signs for TradeGo FinTech you should be aware of, and 1 of them can't be ignored.

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