What Type Of Returns Would Zota Health Care's(NSE:ZOTA) Shareholders Have Earned If They Purchased Their SharesYear Ago?

While it may not be enough for some shareholders, we think it is good to see the Zota Health Care Limited (NSE:ZOTA) share price up 16% in a single quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 10% in a year, falling short of the returns you could get by investing in an index fund.

See our latest analysis for Zota Health Care

While Zota Health Care made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last twelve months, Zota Health Care increased its revenue by 3.9%. That's not a very high growth rate considering it doesn't make profits. Given this fairly low revenue growth (and lack of profits), it's not particularly surprising to see the stock down 10% in a year. In a hot market it's easy to forget growth is the life-blood of a loss making company. So remember, if you buy a profitless company then you risk being a profitless investor.

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

Take a more thorough look at Zota Health Care's financial health with this free report on its balance sheet.

A Different Perspective

Zota Health Care shareholders are down 9.5% for the year, (even including dividends), but the broader market is up 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 4% per year, much better than the more recent returns. 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 Zota Health Care better, we need to consider many other factors. Even so, be aware that Zota Health Care is showing 5 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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 IN exchanges.

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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. 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.
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