The 26% return this week takes Exagen's (NASDAQ:XGN) shareholders one-year gains to 102%

Exagen Inc. (NASDAQ:XGN) shareholders might be concerned after seeing the share price drop 23% in the last month. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 102% in that time. So it may be that the share price is simply cooling off after a strong rise. The real question is whether the business is trending in the right direction.

The past week has proven to be lucrative for Exagen investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Exagen

Exagen 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Exagen grew its revenue by 8.0% last year. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 102%. 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 good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Exagen in this interactive graph of future profit estimates.

A Different Perspective

It's good to see that Exagen has rewarded shareholders with a total shareholder return of 102% in the last twelve months. That certainly beats the loss of about 13% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Even so, be aware that Exagen is showing 3 warning signs in our investment analysis , you should know about...

Exagen is not the only stock that insiders are buying. For those who like to find lesser know companies 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.