Further weakness as KORU Medical Systems (NASDAQ:KRMD) drops 10% this week, taking five-year losses to 38%

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term KORU Medical Systems, Inc. (NASDAQ:KRMD) shareholders for doubting their decision to hold, with the stock down 38% over a half decade. On top of that, the share price is down 10% in the last week.

If the past week is anything to go by, investor sentiment for KORU Medical Systems isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out 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. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over five years, KORU Medical Systems grew its revenue at 6.7% per year. That's a pretty good rate for a long time period. We doubt many shareholders are ok with the fact the share price has fallen 7% each year for half a decade. Clearly, the expectations from back then have not been satisfied. The lesson is that if you buy shares in a money losing company you could end up losing money.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market gained around 32% in the last year, KORU Medical Systems shareholders lost 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% 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 KORU Medical Systems better, we need to consider many other factors. Even so, be aware that KORU Medical Systems is showing 1 warning sign in our investment analysis , you should know about...

Of course KORU Medical Systems may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.