Shareholders have faith in loss-making Paragon 28 (NYSE:FNA) as stock climbs 7.1% in past week, taking one-year gain to 12%

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Paragon 28, Inc. (NYSE:FNA) share price is 12% higher than it was a year ago, much better than the market decline of around 8.9% (not including dividends) in the same period. That's a solid performance by our standards! Paragon 28 hasn't been listed for long, so it's still not clear if it is a long term winner.

Since the stock has added US$97m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Paragon 28

SWOT Analysis for Paragon 28

Paragon 28 wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Paragon 28 saw its revenue grow by 23%. That's a fairly respectable growth rate. While the share price performed well, gaining 12% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Paragon 28 stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Paragon 28 boasts a total shareholder return of 12% for the last year. Unfortunately the share price is down 5.1% over the last quarter. Shorter term share price moves often don't signify much about the business itself. 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 Paragon 28 is showing 4 warning signs in our investment analysis , you should know about...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.