It certainly might concern DarioHealth Corp. (NASDAQ:DRIO) shareholders to see the share price down 41% in just 30 days. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 112%. So it may be that the share price is simply cooling off after a strong rise. The real question is whether the business is trending in the right direction.
DarioHealth 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
DarioHealth actually shrunk its revenue over the last year, with a reduction of 4.7%. We're a little surprised to see the share price pop 112% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
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. You can see what analysts are predicting for DarioHealth in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that DarioHealth has rewarded shareholders with a total shareholder return of 112% in the last twelve months. 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. It's always interesting to track share price performance over the longer term. But to understand DarioHealth better, we need to consider many other factors. For example, we've discovered 4 warning signs for DarioHealth (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
DarioHealth is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.