Gusbourne SPC (LON: GUS) Shareholders could be worried after seeing the share price drop 15% in the last quarter. In hindsight, the stock produced good profits over five years. After all, the share price rose 65%, beating the market during this time.

Let’s take a look at the underlying fundamentals over the longer term and see if they’ve been consistent with shareholder returns.

Check out our latest analysis for Gusbourne

Given that Gusbourne has suffered a loss over the past twelve months, we believe the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. As you can imagine, rapid revenue growth, when sustained, often leads to rapid profit growth.

Over the past 5 years, Gusbourne has seen its turnover increase by 28% per year. That’s way above most nonprofit businesses. It’s good to see that the stock is holding 11%, but that’s not entirely surprising given that earnings are growing strongly. If strong income growth continues, we would expect the stock price to follow over time. The opportunity is where the market has not fully captured the growth of the underlying business.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

We are happy to report that the CEO is paid more modestly than most CEOs of similar capitalization companies. But while CEO compensation is still worth checking out, the really important question is whether the company can increase profits in the future. So it makes sense to check what analysts think Gusbourne earn in the future (free profit forecast).

What about the Total Shareholder Return (TSR)?

We have already covered the development of Gusbourne’s share price, but we should also mention its total shareholder return (TSR). TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spin-offs. We note that Gusbourne’s TSR, at 70%, is greater than its share price return by 65%. When you consider that he did not pay a dividend, this data suggests that the shareholders benefited from a spin-off or had the possibility of acquiring shares at an attractive price during a capital increase at reduced price.

The story continues

A different perspective

It is nice to see that Gusbourne shareholders have received a total shareholder return of 59% over the past year. As the 1-year TSR is better than the 5-year TSR (the latter standing at 11% per year), it seems that the stock’s performance has improved in recent times. Someone with a bullish outlook might take the recent improvement in TSR as indicating that the business itself is improving over time. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we have identified 6 warning signs for Gusbourne (1 is of concern) that you need to be aware of.

We’ll like Gusbourne better if we see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on UK stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.