Pulmonx (NASDAQ:LUNG) shareholders are up 11% this past week, but still in the red over the last year
Pulmonx Corporation (NASDAQ:LUNG) shareholders should be happy to see the share price up 11% in the last week. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 64% in that time. Some might say the recent bounce is to be expected after such a bad drop. It may be that the fall was an overreaction.
Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.
See our latest analysis for Pulmonx
Given that Pulmonx didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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 Pulmonx saw its revenue grow by 50%. That's a strong result which is better than most other loss making companies. In contrast the share price is down 64% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Pulmonx's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We doubt Pulmonx shareholders are happy with the loss of 64% over twelve months. That falls short of the market, which lost 17%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 33% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. For instance, we've identified 4 warning signs for Pulmonx that you should be aware of.
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.
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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.
