Stock Analysis
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- NasdaqGM:FLGT
Fulgent Genetics (NASDAQ:FLGT) advances 6.2% this week, taking five-year gains to 742%
For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. For example, the Fulgent Genetics, Inc. (NASDAQ:FLGT) share price is up a whopping 742% in the last half decade, a handsome return for long term holders. And this is just one example of the epic gains achieved by some long term investors. Better yet, the share price has risen 6.2% in the last week. Anyone who held for that rewarding ride would probably be keen to talk about it.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
See our latest analysis for Fulgent Genetics
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last half decade, Fulgent Genetics became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Fulgent Genetics has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Fulgent Genetics' financial health with this free report on its balance sheet.
A Different Perspective
We regret to report that Fulgent Genetics shareholders are down 50% for the year. Unfortunately, that's worse than the broader market decline of 12%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 53% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Fulgent Genetics is showing 2 warning signs in our investment analysis , and 1 of those is concerning...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
What are the risks and opportunities for Fulgent Genetics?
Fulgent Genetics, Inc., together with its subsidiaries, provides clinical diagnostic and therapeutic development solutions to physicians and patients in the United States and internationally.
Rewards
Price-To-Earnings ratio (6.1x) is below the US market (14.6x)
Risks
Earnings are forecast to decline by an average of 67.3% per year for the next 3 years
Profit margins (23.2%) are lower than last year (51.1%)
Further research on
Fulgent Genetics
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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.
About NasdaqGM:FLGT
Fulgent Genetics
Fulgent Genetics, Inc., together with its subsidiaries, provides clinical diagnostic and therapeutic development solutions to physicians and patients in the United States and internationally.
Excellent balance sheet and fair value.
