Inari Medical (NASDAQ:NARI) shareholders have earned a 7.4% CAGR over the last three years
Inari Medical, Inc. (NASDAQ:NARI) shareholders might be concerned after seeing the share price drop 15% in the last month. In contrast the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 24% over that time, given the rising market.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Inari Medical
Inari Medical isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 3 years Inari Medical saw its revenue grow at 50% per year. That's well above most pre-profit companies. The stock is up 7% over that time - a decent but not impressive return. Generally, we'd expect a stronger share price, given the impressive revenue growth. It could be that the stock was previously over-priced, or its losses might worry the market. But you might want to take a closer look at this one.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free report showing analyst forecasts should help you form a view on Inari Medical
A Different Perspective
Over the last year, Inari Medical shareholders took a loss of 2.2%. In contrast the market gained about 10%. 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 7% 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 Inari Medical better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Inari Medical you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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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