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Is iCAD's (NASDAQ:ICAD) Share Price Gain Of 140% Well Earned?

Simply Wall St

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. For instance the iCAD, Inc. (NASDAQ:ICAD) share price is 140% higher than it was three years ago. How nice for those who held the stock! It's also good to see the share price up 25% over the last quarter. But this could be related to the strong market, which is up 12% in the last three months.

Check out our latest analysis for iCAD

Given that iCAD 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years iCAD saw its revenue grow at 0.7% per year. Considering the company is losing money, we think that rate of revenue growth is uninspiring. In contrast, the stock has popped 34% per year in that time - an impressive result. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It seems likely that the market is pretty optimistic about iCAD, given it is losing money.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NasdaqCM:ICAD Income Statement, January 1st 2020

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

A Different Perspective

It's nice to see that iCAD shareholders have received a total shareholder return of 110% over the last year. That certainly beats the loss of about 3.7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

But note: iCAD may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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.

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. Thank you for reading.