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Does AtriCure's (NASDAQ:ATRC) Share Price Gain of 64% Match Its Business Performance?

Simply Wall St

It hasn't been the best quarter for AtriCure, Inc. (NASDAQ:ATRC) shareholders, since the share price has fallen 20% in that time. But at least the stock is up over the last five years. In that time, it is up 64%, which isn't bad, but is below the market return of 69%.

See our latest analysis for AtriCure

AtriCure isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, AtriCure can boast revenue growth at a rate of 16% per year. Even measured against other revenue-focussed companies, that's a good result. While the compound gain of 10% per year is good, it's not unreasonable given the strong revenue growth. If you think there could be more growth to come, now might be the time to take a close look at AtriCure. Of course, you'll have to research the business more fully to figure out if this is an attractive opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NasdaqGM:ATRC Income Statement, October 8th 2019

If you are thinking of buying or selling AtriCure stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

AtriCure shareholders are down 23% for the year, but the market itself is up 3.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 10%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. If you would like to research AtriCure in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.