Imagine Holding Invitae (NYSE:NVTA) Shares While The Price Zoomed 557% Higher
Invitae Corporation (NYSE:NVTA) shareholders have seen the share price descend 17% over the month. But that doesn't undermine the fantastic longer term performance (measured over five years). In fact, during that period, the share price climbed 557%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain.
It really delights us to see such great share price performance for investors.
Check out our latest analysis for Invitae
Invitae isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
For the last half decade, Invitae can boast revenue growth at a rate of 52% per year. That's well above most pre-profit companies. Fortunately, the market has not missed this, and has pushed the share price up by 46% per year in that time. Despite the strong run, top performers like Invitae have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Invitae's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Invitae shareholders have received a total shareholder return of 149% over the last year. That gain is better than the annual TSR over five years, which is 46%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Even so, be aware that Invitae is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
We will like Invitae 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.
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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