Pulmonx Corporation (NASDAQ:LUNG) shareholders should be happy to see the share price up 19% in the last month. But that’s not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 56% in that time. So the bounce should be viewed in that context. Of course, it could be that the fall was overdone.
While the stock has risen 13% in the past week but long term shareholders are still in the red, let’s see what the fundamentals can tell us.
See our latest analysis for Pulmonx
Pulmonx 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. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, Pulmonx increased its revenue by 50%. That’s well above most other pre-profit companies. Meanwhile, the share price slid 56%. This could mean hype has come out of the stock because the bottom line is concerning investors. 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).
Take a more thorough look at Pulmonx’s financial health with this free report on its balance sheet.
A Different Perspective
We doubt Pulmonx shareholders are happy with the loss of 56% over twelve months. That falls short of the market, which lost 13%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. The share price decline has continued throughout the most recent three months, down 33%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. 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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 3 warning signs with Pulmonx , and understanding them should be part of your investment process.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
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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