Strong week for AtriCure (NASDAQ:ATRC) shareholders doesn't alleviate pain of three-year loss

If you love investing in stocks you're bound to buy some losers. But long term AtriCure, Inc. (NASDAQ:ATRC) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 68% drop in the share price over that period. And over the last year the share price fell 49%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 26% in the last three months.

While the stock has risen 7.4% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for AtriCure

Given that AtriCure 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over three years, AtriCure grew revenue at 21% per year. That is faster than most pre-profit companies. In contrast, the share price is down 19% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.

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

This free interactive report on AtriCure's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 25% in the last year, AtriCure shareholders lost 49%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand AtriCure better, we need to consider many other factors. For instance, we've identified 2 warning signs for AtriCure that you should be aware of.

But note: AtriCure may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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