Intelligent Ultrasound Group (LON:IUG) shareholder returns have been splendid, earning 109% in 3 years

By
Simply Wall St
Published
November 11, 2021
AIM:IUG
Source: Shutterstock

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. To wit, the Intelligent Ultrasound Group plc (LON:IUG) share price has flown 109% in the last three years. That sort of return is as solid as granite. It's also good to see the share price up 29% over the last quarter.

Since the stock has added UK£5.4m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Intelligent Ultrasound Group

Given that Intelligent Ultrasound Group 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 3 years Intelligent Ultrasound Group saw its revenue grow at 4.2% per year. That's not a very high growth rate considering it doesn't make profits. In comparison, the share price rise of 28% per year over the last three years is pretty impressive. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It seems likely that the market is pretty optimistic about Intelligent Ultrasound Group, given it is losing money.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
AIM:IUG Earnings and Revenue Growth November 12th 2021

Take a more thorough look at Intelligent Ultrasound Group's financial health with this free report on its balance sheet.

A Different Perspective

Intelligent Ultrasound Group shareholders are up 20% for the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 7% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Intelligent Ultrasound Group (at least 1 which is significant) , and understanding them should be part of your investment process.

We will like Intelligent Ultrasound Group 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 GB exchanges.

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