07-05-2025
PainChek (ASX:PCK) adds AU$13m to market cap in the past 7 days, though investors from five years ago are still down 71%
It is a pleasure to report that the PainChek Limited (ASX:PCK) is up 56% in the last quarter. But that doesn't change the fact that the returns over the last half decade have been stomach churning. Five years have seen the share price descend precipitously, down a full 72%. It's true that the recent bounce could signal the company is turning over a new leaf, but we are not so sure. The fundamental business performance will ultimately determine if the turnaround can be sustained.
On a more encouraging note the company has added AU$13m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.
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PainChek isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last half decade, PainChek saw its revenue increase by 50% per year. That's better than most loss-making companies. So it's not at all clear to us why the share price sunk 11% throughout that time. You'd have to assume the market is worried that profits won't come soon enough. We'd recommend carefully checking for indications of future growth - and balance sheet threats - before considering a purchase.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
ASX:PCK Earnings and Revenue Growth May 7th 2025
If you are thinking of buying or selling PainChek stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that PainChek shareholders have received a total shareholder return of 38% over the last year. That certainly beats the loss of about 11% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand PainChek better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for PainChek (of which 1 is a bit unpleasant!) you should know about.
