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Investors one-year losses grow to 46% as the stock sheds US$91m this past week

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Health Catalyst, Inc. (NASDAQ:HCAT) share price slid 46% over twelve months. That's disappointing when you consider the market returned 4.5%. Because Health Catalyst hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 28% in the last three months.

Since Health Catalyst has shed US$91m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Health Catalyst

Health Catalyst wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good 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.

In the last twelve months, Health Catalyst increased its revenue by 28%. We think that is pretty nice growth. Meanwhile, the share price is down 46% over twelve months, which is disappointing given the progress made. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

Health Catalyst is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Health Catalyst in this interactive graph of future profit estimates.

A Different Perspective

Given that the market gained 4.5% in the last year, Health Catalyst shareholders might be miffed that they lost 46%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 28%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Health Catalyst better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Health Catalyst .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

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