Stock Analysis

If You Had Bought Insulet (NASDAQ:PODD) Stock Five Years Ago, You Could Pocket A 740% Gain Today

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NasdaqGS:PODD
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Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. To wit, the Insulet Corporation (NASDAQ:PODD) share price has soared 740% over five years. This just goes to show the value creation that some businesses can achieve. It's even up 5.4% in the last week. This could be related to the recent financial results, released less than a week ago -- you can catch up on the most recent data by reading our company report.

Anyone who held for that rewarding ride would probably be keen to talk about it.

See our latest analysis for Insulet

Given that Insulet only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Insulet can boast revenue growth at a rate of 23% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 53%(per year) over the same period. Despite the strong run, top performers like Insulet have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

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

earnings-and-revenue-growth
NasdaqGS:PODD Earnings and Revenue Growth March 2nd 2021

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Insulet will earn in the future (free profit forecasts).

A Different Perspective

Insulet's TSR for the year was broadly in line with the market average, at 49%. It has to be noted that the recent return falls short of the 53% shareholders have gained each year, over half a decade. Although the share price growth has slowed, the longer term story points to a business well worth watching. It's always interesting to track share price performance over the longer term. But to understand Insulet better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Insulet you should be aware of, and 1 of them makes us a bit uncomfortable.

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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What are the risks and opportunities for Insulet?

Insulet Corporation develops, manufactures, and sells insulin delivery systems for people with insulin-dependent diabetes.

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Rewards

  • Earnings are forecast to grow 50.65% per year

  • Became profitable this year

Risks

  • Interest payments are not well covered by earnings

  • Significant insider selling over the past 3 months

View all Risks and Rewards

Share Price

Market Cap

1Y Return

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