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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! Take, for example electroCore, Inc. (NASDAQ:ECOR). Its share price is already up an impressive 147% in the last twelve months. It's also good to see the share price up 81% over the last quarter. We'll need to follow electroCore for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Because electroCore made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 electroCore saw its revenue grow by 55%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 147% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think electroCore will earn in the future (free profit forecasts).
A Different Perspective
electroCore shareholders should be happy with the total gain of 147% over the last twelve months. And the share price momentum remains respectable, with a gain of 81% 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. It's always interesting to track share price performance over the longer term. But to understand electroCore better, we need to consider many other factors. Take risks, for example - electroCore has 5 warning signs (and 2 which shouldn't be ignored) we think you should know about.
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.
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. 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.
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