Is IntriCon’s (NASDAQ:IIN) 130% Share Price Increase Well Justified?

The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For example, the IntriCon Corporation (NASDAQ:IIN) share price has soared 130% in the last three years. Most would be happy with that. On the other hand, we note it’s down 9.8% in about a month.

Check out our latest analysis for IntriCon

IntriCon 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 3 years IntriCon saw its revenue grow at 22% per year. That’s much better than most loss-making companies. Along the way, the share price gained 32% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. That’s not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NasdaqGM:IIN Income Statement, February 17th 2020
NasdaqGM:IIN Income Statement, February 17th 2020

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

A Different Perspective

IntriCon shareholders are down 37% for the year, but the market itself is up 23%. 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 17%, 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we’ve discovered 1 warning sign for IntriCon that you should be aware of before investing here.

We will like IntriCon better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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.