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Announcing: Profound Medical (TSE:PRN) Stock Increased An Energizing 101% In The Last Year

Simply Wall St

When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example Profound Medical Corp. (TSE:PRN). Its share price is already up an impressive 101% in the last twelve months. On top of that, the share price is up 54% in about a quarter. And shareholders have also done well over the long term, with an increase of 62% in the last three years.

View our latest analysis for Profound Medical

Because Profound Medical 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.

Profound Medical grew its revenue by 60% last year. That's well above most other pre-profit companies. And the share price has responded, gaining 101% as we previously mentioned. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

TSX:PRN Income Statement, January 21st 2020

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Pleasingly, Profound Medical's total shareholder return last year was 101%. So this year's TSR was actually better than the three-year TSR (annualized) of 17%. Given the track record of solid returns over varying time frames, it might be worth putting Profound Medical on your watchlist. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Profound Medical , and understanding them should be part of your investment process.

Of course Profound Medical may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.