Even though NeuroMetrix (NASDAQ: NURO) lost $ 18 million in market cap in the past 7 days, shareholders are still up 484% year over year

NeuroMetrix, Inc. (NASDAQ: NURO) Shareholders might be rather worried as the stock price fell 39% last month. But over the past year or so, the stock price has taken off like one of Elon Musk’s rockets. Indeed, the share price rose 484% during this period. We can probably expect the recent fall after such a steep rise. Of course, winners often keep winning, so there may be more wins to come (if business fundamentals stack up).

While the stock has fallen 24% this week, it’s worth focusing on the long term and seeing if historical stock returns have been driven by underlying fundamentals.

Check out our latest review for NeuroMetrix

NeuroMetrix is ​​not profitable right now, so most analysts would look to revenue growth to get a feel for how fast the underlying business is growing. Shareholders of unprofitable companies generally expect strong revenue growth. As you can imagine, rapid revenue growth, when sustained, often leads to rapid profit growth.

Over the past twelve months, NeuroMetrix’s turnover has increased by 12%. It is not a very high growth rate since it does not make a profit. So it’s really surprising that the stock price has climbed 484% in just one year. It’s great to see that some have made big profits, but we’re not sure the increase is warranted. It just shows that you can make a lot of money if you buy the right stock early.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

NasdaqCM: NURO Earnings and Revenue Growth September 29, 2021

We are happy to report that the CEO is paid more modestly than most CEOs of companies with similar capitalization. It’s always worth keeping an eye on CEO compensation, but a bigger question is whether the company will increase profits over the years. Before buying or selling a stock, we always recommend a careful review of historical growth trends, available here.

A different perspective

It is nice to see that NeuroMetrix shareholders have received a total shareholder return of 484% over the past year. There is no doubt that these recent returns are much better than the TSR’s loss of 14% per year over five years. We tend to place more emphasis on long-term performance than short-term performance, but the recent improvement could point to a (positive) inflection point within the company. I find it very interesting to look at the stock price over the long term as an indicator of company performance. But to really understand better, we have to take other information into account as well. For example, we have identified 4 warning signs for NeuroMetrix that you should be aware of.

If you are like me then you not want to miss it free list of growing companies that insiders buy.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

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