Yahoo Finance If You Had Bought Evolent Health (NYSE:EVH) Shares A Year Ago You'd Have Earned71% Returns
If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Evolent Health, Inc. (NYSE:EVH) share price is up 71% in the last year, clearly besting the market return of around 16% (not including dividends). So that should have shareholders smiling. On the other hand, longer term shareholders have had a tougher run, with the stock falling 34% in three years.
Check out our latest analysis for Evolent Health
Because Evolent Health 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Evolent Health grew its revenue by 28% last year. That's a fairly respectable growth rate. While the share price performed well, gaining 71% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But it's crucial to check profitability and cash flow before forming a view on the future.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
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 Evolent Health in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Evolent Health has rewarded shareholders with a total shareholder return of 71% in the last twelve months. That certainly beats the loss of about 4.3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Evolent Health better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Evolent Health you should be aware of.
Evolent Health 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.
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