Amidst increasing losses, Investors bid up KORU Medical Systems (NASDAQ:KRMD) 24% this past week

KORU Medical Systems, Inc. (NASDAQ:KRMD) shareholders should be happy to see the share price up 26% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 41% in the last three years, falling well short of the market return.

On a more encouraging note the company has added US$23m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

View our latest analysis for KORU Medical Systems

KORU Medical Systems isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. 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, KORU Medical Systems grew revenue at 11% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 12% per year, for three years. This implies the market had higher expectations of KORU Medical Systems. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

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

Take a more thorough look at KORU Medical Systems' financial health with this free report on its balance sheet.

A Different Perspective

Investors in KORU Medical Systems had a tough year, with a total loss of 27%, against a market gain of about 26%. 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 1.5% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Case in point: We've spotted 1 warning sign for KORU Medical Systems you should be aware of.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com