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Investors ignore increasing losses at Prime Focus (NSE:PFOCUS) as stock jumps 10% this past week

Simply Wall St · 08/05 00:09

Long term investing can be life changing when you buy and hold the truly great businesses. And we've seen some truly amazing gains over the years. To wit, the Prime Focus Limited (NSE:PFOCUS) share price has soared 467% over five years. And this is just one example of the epic gains achieved by some long term investors. Also pleasing for shareholders was the 56% gain in the last three months.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

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Prime Focus isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

For the last half decade, Prime Focus can boast revenue growth at a rate of 8.9% per year. That's a fairly respectable growth rate. Arguably it's more than reflected in the very strong share price gain of 41% 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
NSEI:PFOCUS Earnings and Revenue Growth August 5th 2025

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's nice to see that Prime Focus shareholders have received a total shareholder return of 10% over the last year. However, that falls short of the 41% 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. 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 Prime Focus you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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