Buying shares in the best businesses can build meaningful wealth for you and your family. While not every stock performs well, when investors win, they can win big. Don't believe it? Then look at the Smartpay Holdings Limited (NZSE:SPY) share price. It's 341% higher than it was five years ago. And this is just one example of the epic gains achieved by some long term investors. Meanwhile the share price is 4.2% higher than it was a week ago.

So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.

Check out our latest analysis for Smartpay Holdings

Because Smartpay Holdings 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years Smartpay Holdings saw its revenue grow at 14% per year. That's a fairly respectable growth rate. Arguably it's more than reflected in the very strong share price gain of 35% a year over a half a decade. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers). earnings-and-revenue-growth

This free interactive report on Smartpay Holdings' 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 Smartpay Holdings shareholders have received a total shareholder return of 2.7% over the last year. However, that falls short of the 35% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.



If you like to buy stocks alongside management, then you might just love this freelist of companies. (Hint: insiders have been buying them).

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