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Introducing Cytosorbents (NASDAQ:CTSO), The Stock That Dropped 41% In The Last Five Years

Simply Wall St

Cytosorbents Corporation (NASDAQ:CTSO) shareholders should be happy to see the share price up 23% in the last month. But if you look at the last five years the returns have not been good. In fact, the share price is down 41%, which falls well short of the return you could get by buying an index fund.

See our latest analysis for Cytosorbents

Cytosorbents isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Cytosorbents grew its revenue at 39% per year. That's well above most other pre-profit companies. Shareholders are no doubt disappointed with the loss of 10.0%, each year, in that time. You could say that the market has been harsh, given the top line growth. If that's the case, now might be the smart time to take a close look at it.

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

NasdaqCM:CTSO Income Statement, January 29th 2020

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Cytosorbents

A Different Perspective

While the broader market gained around 24% in the last year, Cytosorbents shareholders lost 36%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10.0% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality business. 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. Take risks, for example - Cytosorbents has 3 warning signs we think you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do 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.

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.