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Did Business Growth Power Veracyte's (NASDAQ:VCYT) Share Price Gain of 255%?

Simply Wall St

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For instance the Veracyte, Inc. (NASDAQ:VCYT) share price is 255% higher than it was three years ago. How nice for those who held the stock! In more good news, the share price has risen -9.7% in thirty days.

Check out our latest analysis for Veracyte

Veracyte 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Veracyte's revenue trended up 21% each year over three years. That's much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 53% compound over three years. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

NasdaqGM:VCYT Income Statement, December 4th 2019

This free interactive report on Veracyte's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Veracyte shareholders have received a total shareholder return of 118% over one year. That gain is better than the annual TSR over five years, which is 28%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. If you would like to research Veracyte in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

Of course Veracyte 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 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.