U.S. Markets closed

Did Business Growth Power Guardant Health's (NASDAQ:GH) Share Price Gain of 114%?

Simply Wall St

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Guardant Health, Inc. (NASDAQ:GH) share price had more than doubled in just one year - up 114%. Also pleasing for shareholders was the 26% gain in the last three months. But this could be related to the strong market, which is up 12% in the last three months. Guardant Health hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Guardant Health

Given that Guardant Health didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong 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 Guardant Health saw its revenue grow by 137%. That's stonking growth even when compared to other loss-making stocks. And the share price has responded, gaining 114% 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.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NasdaqGS:GH Income Statement, January 1st 2020

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Guardant Health shareholders have gained 114% over the last year. And the share price momentum remains respectable, with a gain of 26% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

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.

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.