A diverse portfolio of stocks will always have winners and losers. But if you're going to beat the market overall, you need to have individual stocks that outperform. One such company is Silk Road Medical, Inc (NASDAQ:SILK), which saw its share price increase 37% in the last year, slightly above the market return of around 36% (not including dividends). We'll need to follow Silk Road Medical for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Given that Silk Road Medical 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Silk Road Medical saw its revenue grow by 29%. That's a fairly respectable growth rate. Buyers pushed the share price 37% in response, which isn't unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But it's crucial to check profitability and cash flow before forming a view on the future.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Silk Road Medical's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
In the last year the market returned about 40%, and Silk Road Medical generated a TSR of 37% for its shareholders. However, the share price has actually dropped 4.4% over the last three months. This could simply be a short term fluctuation, though. Even the biggest winners have their down periods. 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 Silk Road Medical you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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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