Shares of Bellamy’s Australia Ltd (ASX: BAL) have continued to rise today, extending what has been a three-day winning streak so far. The shares have lifted 3.4% to $11.43 after trading for as little as $9.51 earlier this month.

Of course, Bellamy’s has become a well-known brand over the past year or so. It has received plenty of attention from the financial media, mostly due to its booming sales and the difficulty experienced by supermarkets around the country to keep their shelves stocked with its products.

This even prompted a share price gain of as much as 900% during the 2015 calendar year, hitting a high of $16.50.

Although the shares have retreated considerably since, they have rediscovered some form in recent weeks. That trend has continued today in what can likely be attributed to the group’s investor presentation in the United States.

These two charts do a lot of the talking:

Source: Bellamy's Investor Presentation

Source: Bellamy’s Investor Presentation

Unlike many ‘hot tech stocks’ or speculative mining shares that soar for no apparent reason other than investor greed, Bellamy’s backed its surging share price up with some extremely impressive growth.

As you can see in the charts above, revenue more than doubled during financial year 2015 and grew 83.3% during the first-half of 2016, compared to the prior corresponding period (pcp). The group also confirmed it is on track to achieve revenue in the range of $240 million to $260 million for the full-year, possibly doubling what the group achieved in FY15.

More importantly, the group’s earnings before interest and tax (EBIT) are growing at an even faster rate, highlighting Bellamy’s improving margins (although it reiterated that second-half margins are expected to be broadly in line with the first half in FY16). EBIT for the first-half completely overlapped EBIT achieved during the entire 2015 financial year.

Bellamy’s also noted that it is “well positioned for potential regulatory changes in China“. This likely relates to the possibility that China will crack-down on ‘grey-market’ transactions which are those where Australian residents buy the product in Australia, and then sell it to Chinese residents.

These transactions are believed to have represented a large portion of Bellamy’s sales in recent periods, although the group is trying to increase its direct sales to China to mitigate those kind of sales (and to take advantage of the higher margins). Notably, Bellamy’s fellow infant formula producers, including a2 Milk Company Ltd (Australia) (ASX: A2M) and Blackmores Limited (ASX: BKL), also need to position themselves for potential regulatory changes.

Foolish takeaway

The multiples on which Bellamy’s shares are currently trading are likely to deter some investors. Indeed, investors should always be wary of paying too much for any company, and Bellamy’s is no different (for the record, I sold some of my shares recently, although I still hold a parcel).

In saying that however, I do believe there is still plenty of room left for Bellamy’s to expand, even if its early gains have already been realised. It highlighted in its report (courtesy of Zenith International, 2015) that the global infant formula market is estimated to exceed US$50 billion annually with a growth rate of 7% per annum well exceeding global GDP. Much of this growth will occur in China, and Bellamy’s appears well positioned to benefit.

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Motley Fool contributor Ryan Newman owns shares of Bellamy's Australia. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia owns shares of Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.