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HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM) shareholders should be happy to see the share price up 15% in the last month. But that isn't much consolation to those who have suffered through the declines of the last year. During that time the share price has sank like a stone, descending 68%. It's not that amazing to see a bounce after a drop like that. Arguably, the fall was overdone.
HTG Molecular Diagnostics 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
HTG Molecular Diagnostics grew its revenue by 2.1% over the last year. That's not a very high growth rate considering it doesn't make profits. It's likely this muted growth has contributed to the share price decline of 68% in the last year. Like many holders, we really want to see better revenue growth in companies that lose money. When a stock falls hard like this, it can signal an over-reaction. Our preference is to wait for a fundamental improvements before buying, but now could be a good time for some research.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling HTG Molecular Diagnostics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Over the last year, HTG Molecular Diagnostics shareholders took a loss of 68%. In contrast the market gained about 27%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 28% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
Of course HTG Molecular Diagnostics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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