Some LifeMD, Inc. (NASDAQ:LFMD) shareholders are probably rather concerned to see the share price fall 32% over the last three months. But over the last three years the stock has shone bright like a diamond. Over that time, we've been excited to watch the share price climb an impressive 971%. Arguably, the recent fall is to be expected after such a strong rise. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.
Anyone who held for that rewarding ride would probably be keen to talk about it.
Given that LifeMD 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.
LifeMD's revenue trended up 73% each year over three years. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 120% per year in that time. It's always tempting to take profits after a share price gain like that, but high-growth companies like LifeMD can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for LifeMD in this interactive graph of future profit estimates.
A Different Perspective
It's nice to see that LifeMD shareholders have received a total shareholder return of 623% over the last year. That gain is better than the annual TSR over five years, which is 49%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 3 warning signs for LifeMD you should be aware of, and 1 of them is concerning.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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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