Investors ignore increasing losses at WELL Health Technologies (TSE:WELL) as stock jumps 8.6% this past week

By
Simply Wall St
Published
January 25, 2022
TSX:WELL
Source: Shutterstock

The last three months have been tough on WELL Health Technologies Corp. (TSE:WELL) shareholders, who have seen the share price decline a rather worrying 33%. But over three years the performance has been really wonderful. Indeed, the share price is up a whopping 935% in that time. So the recent fall doesn't do much to dampen our respect for the business. Only time will tell if there is still too much optimism currently reflected in the share price. It really delights us to see such great share price performance for investors.

Since the stock has added CA$73m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for WELL Health Technologies

Because WELL Health Technologies made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years WELL Health Technologies has grown its revenue at 79% annually. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 118% per year in that time. Despite the strong run, top performers like WELL Health Technologies have been known to go on winning for decades. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
TSX:WELL Earnings and Revenue Growth January 25th 2022

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling WELL Health Technologies stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

The last twelve months weren't great for WELL Health Technologies shares, which cost holders 44%, while the market was up about 18%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 118% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track share price performance over the longer term. But to understand WELL Health Technologies better, we need to consider many other factors. For instance, we've identified 2 warning signs for WELL Health Technologies that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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