Senseonics Holdings, Inc. (NYSEMKT:SENS) shareholders should be happy to see the share price up 27% in the last month. But that doesn’t change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 16% in the last three years, falling well short of the market return.
Senseonics Holdings 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.
Over three years, Senseonics Holdings grew revenue at 123% per year. That’s well above most other pre-profit companies. The share price drop of 5.5% per year over three years would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. It’s possible that the prior share price assumed unrealistically high future growth. Before considering a purchase, investors should consider how quickly expenses are growing, relative to revenue.
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.
If you are thinking of buying or selling Senseonics Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Senseonics Holdings shareholders are down 7.9% for the year, falling short of the market return. Meanwhile, the broader market slid about 0.5%, likely weighing on the stock. The three-year loss of 5.5% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
But note: Senseonics Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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