Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Sensus Healthcare, Inc. (NASDAQ:SRTS) shareholders over the last year, as the share price declined 18%. That contrasts poorly with the market return of 8.3%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 7.1% in three years. Unfortunately the share price momentum is still quite negative, with prices down 11% in thirty days.
Sensus Healthcare 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Sensus Healthcare saw its revenue grow by 17%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 18%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
The last twelve months weren't great for Sensus Healthcare shares, which cost holders 18%, while the market was up about 8.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 2.4% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
Of course Sensus Healthcare 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.
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If you spot an error that warrants correction, please contact the editor at email@example.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.