Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. You won't get it right every time, but when you do, the returns can be truly splendid. For example, the OptimizeRx Corporation (NASDAQ:OPRX) share price is up a whopping 331% in the last three years, a handsome return for long term holders. In the last week shares have slid back 2.1%.
We don't think that OptimizeRx's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Over the last three years OptimizeRx has grown its revenue at 42% annually. That's well above most pre-profit companies. And it's not just the revenue that is taking off. The share price is up 63% per year in that time. It's always tempting to take profits after a share price gain like that, but high-growth companies like OptimizeRx can sometimes sustain strong growth for many years. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We know that OptimizeRx has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at OptimizeRx's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that OptimizeRx shareholders have received a total shareholder return of 19% over one year. Having said that, the five-year TSR of 30% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.