Did Establishment Labs Holdings' (NASDAQ:ESTA) Share Price Deserve to Gain 92%?

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Establishment Labs Holdings Inc. (NASDAQ:ESTA) share price is 92% higher than it was a year ago, much better than the market return of around 21% (not including dividends) in the same period. So that should have shareholders smiling. Establishment Labs Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Establishment Labs Holdings

Given that Establishment Labs Holdings 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Establishment Labs Holdings saw its revenue grow by 0.2%. That's not great considering the company is losing money. The modest growth is probably largely reflected in the share price, which is up 92%. While not a huge gain tht seems pretty reasonable. It could be worth keeping an eye on this one, especially if growth accelerates.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Establishment Labs Holdings

A Different Perspective

Establishment Labs Holdings shareholders should be happy with the total gain of 92% over the last twelve months. And the share price momentum remains respectable, with a gain of 128% in the last three months. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Establishment Labs Holdings better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Establishment Labs Holdings you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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