CareDx (NASDAQ:CDNA) Shareholders Have Enjoyed A Magnificent 1100% Share Price Gain

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. But when you hold the right stock for the right time period, the rewards can be truly huge. One bright shining star stock has been CareDx, Inc (NASDAQ:CDNA), which is 1100% higher than three years ago. On top of that, the share price is up 36% in about a quarter.

It really delights us to see such great share price performance for investors.

View our latest analysis for CareDx

CareDx 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 expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years CareDx saw its revenue grow at 38% per year. That’s well above most pre-profit companies. And it’s not just the revenue that is taking off. The share price is up 129% per year in that time. It’s always tempting to take profits after a share price gain like that, but high-growth companies like CareDx can sometimes sustain strong growth for many years. So we’d recommend you take a closer look at this one, or even put it on your watchlist.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

NasdaqGM:CDNA Income Statement, February 21st 2020
NasdaqGM:CDNA Income Statement, February 21st 2020

If you are thinking of buying or selling CareDx stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 22% in the last year, CareDx shareholders lost 4.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn’t be so upset, since they would have made 36%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we’ve identified 2 warning signs for CareDx that you should be aware of.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.