U.S. Markets open in 1 hr 41 mins
  • S&P Futures

    4,147.25
    +15.00 (+0.36%)
     
  • Dow Futures

    34,000.00
    -148.00 (-0.43%)
     
  • Nasdaq Futures

    12,577.00
    +162.75 (+1.31%)
     
  • Russell 2000 Futures

    1,965.80
    -2.60 (-0.13%)
     
  • Crude Oil

    75.91
    -0.50 (-0.65%)
     
  • Gold

    1,969.50
    +26.70 (+1.37%)
     
  • Silver

    24.58
    +0.97 (+4.09%)
     
  • EUR/USD

    1.0991
    -0.0002 (-0.0220%)
     
  • 10-Yr Bond

    3.3970
    0.0000 (0.00%)
     
  • Vix

    17.66
    -1.74 (-8.97%)
     
  • GBP/USD

    1.2276
    -0.0096 (-0.7771%)
     
  • USD/JPY

    128.4430
    -0.4820 (-0.3739%)
     
  • BTC-USD

    23,790.48
    +693.28 (+3.00%)
     
  • CMC Crypto 200

    543.39
    +300.71 (+123.91%)
     
  • FTSE 100

    7,803.75
    +42.64 (+0.55%)
     
  • Nikkei 225

    27,402.05
    +55.17 (+0.20%)
     

Evolent Health (NYSE:EVH) pulls back 8.8% this week, but still delivers shareholders enviable 61% CAGR over 3 years

Evolent Health, Inc. (NYSE:EVH) shareholders have seen the share price descend 18% over the month. But over the last three years the stock has shone bright like a diamond. Over that time, we've been excited to watch the share price climb an impressive 317%. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. Only time will tell if there is still too much optimism currently reflected in the share price.

In light of the stock dropping 8.8% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

Check out our latest analysis for Evolent Health

Evolent Health wasn't profitable in the last twelve months, 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. 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.

Evolent Health's revenue trended up 11% each year over three years. That's a very respectable growth rate. Arguably the very strong share price gain of 61% a year is very generous when compared to the revenue growth. After a price rise like that many will have the business, and plenty of them will be wondering whether the price moved too high, too fast.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Evolent Health shareholders have received a total shareholder return of 3.9% over one year. Having said that, the five-year TSR of 13% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Evolent Health better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Evolent Health you should know about.

We will like Evolent Health better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here