Skylight Health Group (CVE:SLHG) shareholders are still up 296% over 1 year despite pulling back 12% in the past week

By
Simply Wall St
Published
September 20, 2021
TSXV:SLHG
Source: Shutterstock

It hasn't been the best quarter for Skylight Health Group Inc. (CVE:SLHG) shareholders, since the share price has fallen 24% in that time. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 296% in that time. So it may be that the share price is simply cooling off after a strong rise. The real question is whether the business is trending in the right direction.

In light of the stock dropping 12% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

Check out our latest analysis for Skylight Health Group

Because Skylight Health Group 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.

Skylight Health Group grew its revenue by 59% last year. That's stonking growth even when compared to other loss-making stocks. And the share price has responded, gaining 296% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
TSXV:SLHG Earnings and Revenue Growth September 21st 2021

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. This free report showing analyst forecasts should help you form a view on Skylight Health Group

A Different Perspective

Skylight Health Group shareholders should be happy with the total gain of 296% over the last twelve months. We regret to report that the share price is down 24% over ninety days. Shorter term share price moves often don't signify much about the business itself. 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. Case in point: We've spotted 3 warning signs for Skylight Health Group you should be aware of, and 1 of them is a bit unpleasant.

Skylight Health Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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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