Amidst increasing losses, Investors bid up GoHealth (NASDAQ:GOCO) 20% this past week
It's nice to see the GoHealth, Inc. (NASDAQ:GOCO) share price up 20% in a week. But that isn't much consolation for the painful drop we've seen in the last year. To wit, the stock has dropped 86% over the last year. Arguably, the recent bounce is to be expected after such a bad drop. The important thing is whether the company can turn it around, longer term. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
The recent uptick of 20% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
See our latest analysis for GoHealth
Because GoHealth made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
GoHealth grew its revenue by 20% over the last year. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 86% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for GoHealth in this interactive graph of future profit estimates.
A Different Perspective
GoHealth shareholders are down 86% for the year, even worse than the market loss of 10%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 11% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Take risks, for example - GoHealth has 3 warning signs (and 1 which is a bit concerning) we think you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. 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.
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