While shareholders of Sonida Senior Living (NYSE:SNDA) are in the black over 1 year, those who bought a week ago aren't so fortunate

Sonida Senior Living, Inc. (NYSE:SNDA) shareholders might be concerned after seeing the share price drop 23% in the last quarter. But that doesn't detract from the splendid returns of the last year. During that period, the share price soared a full 154%. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.

In light of the stock dropping 15% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

View our latest analysis for Sonida Senior Living

Sonida Senior Living 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.

Sonida Senior Living grew its revenue by 10% last year. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 154%. We're happy that investors have made money, though we wonder if the increase will be sustained. It's quite likely that the market is considering other factors, not just revenue growth.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Sonida Senior Living's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Sonida Senior Living shareholders have received a total shareholder return of 154% over one year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Sonida Senior Living better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Sonida Senior Living .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).

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.