Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held Natera, Inc. (NASDAQ:NTRA) shares for the last five years, while they gained 362%. This just goes to show the value creation that some businesses can achieve. Also pleasing for shareholders was the 38% gain in the last three months.
Since it's been a strong week for Natera shareholders, let's have a look at trend of the longer term fundamentals.
Natera 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
For the last half decade, Natera can boast revenue growth at a rate of 30% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 36%(per year) over the same period. It's never too late to start following a top notch stock like Natera, since some long term winners go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Natera is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Natera stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
It's nice to see that Natera shareholders have received a total shareholder return of 81% over the last year. That's better than the annualised return of 36% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Natera better, we need to consider many other factors. Even so, be aware that Natera is showing 2 warning signs in our investment analysis , you should know about...
We will like Natera 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 American 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.