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Those who invested in NeuroMetrix (NASDAQ:NURO) a year ago are up 453%

Some NeuroMetrix, Inc. (NASDAQ:NURO) shareholders are probably rather concerned to see the share price fall 55% over the last three months. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Few could complain about the impressive 453% rise, throughout the period. Arguably, the recent fall is to be expected after such a strong rise. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).

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.

Check out our latest analysis for NeuroMetrix

Because NeuroMetrix made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 year NeuroMetrix saw its revenue grow by 12%. That's not a very high growth rate considering it doesn't make profits. So it's truly surprising that the share price rocketed 453% in a single year. We're happy that investors have made money, but we can't help questioning whether the rise is sustainable. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. It might be well worthwhile taking a look at our free report on NeuroMetrix's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that NeuroMetrix shareholders have received a total shareholder return of 453% over the last year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with NeuroMetrix , and understanding them should be part of your investment process.

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 US exchanges.

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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