SOPHiA GENETICS SA (NASDAQ:SOPH) shareholders should be happy to see the share price up 30% in the last quarter. But that is meagre solace when you consider how the price has plummeted over the last year. Specifically, the stock price nose-dived 76% in that time. So it's not that amazing to see a bit of a bounce. Only time will tell if the company can sustain the turnaround.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
SOPHiA GENETICS isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, SOPHiA GENETICS increased its revenue by 21%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 76% lower during the year. One fear might be that the company might be losing too much money and will need to raise more. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at SOPHiA GENETICS' financial health with this free report on its balance sheet.
A Different Perspective
We doubt SOPHiA GENETICS shareholders are happy with the loss of 76% over twelve months. That falls short of the market, which lost 10%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 30% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. Even so, be aware that SOPHiA GENETICS is showing 2 warning signs in our investment analysis , you should know about...
We will like SOPHiA GENETICS better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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.
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