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Imagion Biosystems' (ASX:IBX) investors will be pleased with their solid 125% return over the last three years

Imagion Biosystems Limited (ASX:IBX) shareholders have seen the share price descend 13% over the month. But in three years the returns have been great. In three years the stock price has launched 113% higher: a great result. After a run like that some may not be surprised to see prices moderate. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for Imagion Biosystems

Given that Imagion Biosystems 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Imagion Biosystems' revenue trended up 46% each year over three years. That's much better than most loss-making companies. Along the way, the share price gained 29% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. Nonetheless, we'd say Imagion Biosystems is still worth investigating - successful businesses can often keep growing for long periods.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Imagion Biosystems' total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Imagion Biosystems hasn't been paying dividends, but its TSR of 125% exceeds its share price return of 113%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

Over the last year, Imagion Biosystems shareholders took a loss of 60%. In contrast the market gained about 10.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 31% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Imagion Biosystems better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for Imagion Biosystems you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.