Allpark Empreendimentos Participações e Serviços (BVMF:ALPK3) shareholder returns have been solid, earning 201% in 3 years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Allpark Empreendimentos, Participações e Serviços S.A. (BVMF:ALPK3) share price is 201% higher than it was three years ago. How nice for those who held the stock! On top of that, the share price is up 41% in about a quarter.

Since the stock has added R$107m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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While Allpark Empreendimentos Participações e Serviços made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Allpark Empreendimentos Participações e Serviços' revenue trended up 17% each year over three years. That's pretty nice growth. It's fair to say that the market has acknowledged the growth by pushing the share price up 44% per year. It's hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! Some investors like to buy in just after a company becomes profitable, since that can be a powerful inflexion point.

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

This free interactive report on Allpark Empreendimentos Participações e Serviços' 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 Allpark Empreendimentos Participações e Serviços shareholders have received a total shareholder return of 117% over the last year. There's no doubt those recent returns are much better than the TSR loss of 8% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Allpark Empreendimentos Participações e Serviços better, we need to consider many other factors. For instance, we've identified 3 warning signs for Allpark Empreendimentos Participações e Serviços (1 is a bit unpleasant) that you should be aware of.

Of course Allpark Empreendimentos Participações e Serviços 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 Brazilian 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.