These days it’s easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Fulgent Genetics, Inc. (NASDAQ:FLGT) share price is 38% higher than it was a year ago, much better than the market return of around 4.0% (not including dividends) in the same period. That’s a solid performance by our standards! Fulgent Genetics hasn’t been listed for long, so it’s still not clear if it is a long term winner.
Given that Fulgent Genetics didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last twelve months, Fulgent Genetics’s revenue grew by 22%. That’s a fairly respectable growth rate. Buyers pushed the share price 38% in response, which isn’t unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
It’s nice to see that Fulgent Genetics shareholders have gained 38% over the last year. We regret to report that the share price is down 0.4% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Fulgent Genetics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.