It hasn't been the best quarter for Quipt Home Medical Corp. (CVE:QIPT) shareholders, since the share price has fallen 11% in that time. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 61% in that time.
Since the stock has added US$25m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Quipt Home Medical wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 Quipt Home Medical has grown its revenue at 25% annually. That's well above most pre-profit companies. While the compound gain of 17% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put Quipt Home Medical on your radar. If the company is trending towards profitability then it could be very interesting.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Quipt Home Medical is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
The last twelve months weren't great for Quipt Home Medical shares, which cost holders 27%, while the market was up about 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 17% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Quipt Home Medical better, we need to consider many other factors. Take risks, for example - Quipt Home Medical has 1 warning sign we think 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 CA exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.