The market reaction to a profit upgrade at electronics retailer JB Hi-Fi, and a profit downgrade at the global online marketplace for artists, Redbubble, suggests there is a return to valuing companies on fundamentals.

The market rewarded the improved profit margins at JB Hi-Fi with a 7.5 per cent increase in the share price, and punished Redbubble for forecasting losses this calendar year with the loss of a fifth of its market capitalisation.