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Unless you borrow money to invest, the potential losses are limited. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Evolus, Inc. (NASDAQ:EOLS). Its share price is already up an impressive 149% in the last twelve months. It's also up 30% in about a month. On the other hand, longer term shareholders have had a tougher run, with the stock falling 51% in three years.
Evolus 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Evolus saw its revenue grow by 28%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 149%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling Evolus stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that Evolus shareholders have gained 149% (in total) over the last year. That certainly beats the loss of about 15% per year over three years. It could well be that the business has turned around -- or else regained the confidence of investors. It's always interesting to track share price performance over the longer term. But to understand Evolus better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Evolus (including 2 which can't be ignored) .
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. 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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