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Should Benefitfocus (NASDAQ:BNFT) Be Disappointed With Their 78% Profit?

Simply Wall St

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The Benefitfocus, Inc. (NASDAQ:BNFT) share price has had a bad week, falling 11%. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. To wit, it had solidly beat the market, up 78%.

Check out our latest analysis for Benefitfocus

Benefitfocus isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Benefitfocus saw its revenue grow by 9.2%. That's not a very high growth rate considering it doesn't make profits. The modest growth is probably largely reflected in the share price, which is up 78%. While not a huge gain tht seems pretty reasonable. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

NasdaqGM:BNFT Income Statement, April 5th 2019

Benefitfocus is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Benefitfocus stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

It's nice to see that Benefitfocus shareholders have received a total shareholder return of 78% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3.2% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before spending more time on Benefitfocus it might be wise to click here to see if insiders have been buying or selling shares.

For those who like to find winning investments 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 US exchanges.

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.

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. Thank you for reading.