The last three months have been tough on Quanterix Corporation (NASDAQ:QTRX) shareholders, who have seen the share price decline a rather worrying 34%. In contrast, the return over three years has been impressive. The share price marched upwards over that time, and is now 178% higher than it was. So the recent fall in the share price should be viewed in that context. The thing to consider is whether the underlying business is doing well enough to support the current price.
Quanterix isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Quanterix's revenue trended up 40% each year over three years. That's well above most pre-profit companies. Along the way, the share price gained 41% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Pleasingly, Quanterix's total shareholder return last year was 85%. So this year's TSR was actually better than the three-year TSR (annualized) of 41%. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 Quanterix is showing 4 warning signs in our investment analysis , you should know about...
But note: Quanterix may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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