Health Catalyst (NASDAQ:HCAT) shareholders have endured a 79% loss from investing in the stock a year ago
It's not a secret that every investor will make bad investments, from time to time. But serious investors should think long and hard about avoiding extreme losses. So we hope that those who held Health Catalyst, Inc. (NASDAQ:HCAT) during the last year don't lose the lesson, in addition to the 79% hit to the value of their shares. That'd be a striking reminder about the importance of diversification. Notably, shareholders had a tough run over the longer term, too, with a drop of 69% in the last three years. More recently, the share price has dropped a further 13% in a month.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Health Catalyst
Given that Health Catalyst didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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 twelve months, Health Catalyst increased its revenue by 23%. That's definitely a respectable growth rate. However, it seems like the market wanted more, since the share price is down 79%. It could be that the losses are too much for investors to handle without losing their nerve. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Health Catalyst stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
The last twelve months weren't great for Health Catalyst shares, which performed worse than the market, costing holders 79%. The market shed around 13%, no doubt weighing on the stock price. The three-year loss of 19% 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. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for Health Catalyst that you should be aware of.
Health Catalyst is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.
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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.
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