Forian (NASDAQ:FORA) adds US$11m to market cap in the past 7 days, though investors from a year ago are still down 67%

Forian Inc. (NASDAQ:FORA) shareholders should be happy to see the share price up 24% in the last month. But that's not enough to compensate for the decline over the last twelve months. During that time the share price has sank like a stone, descending 67%. It's not that amazing to see a bounce after a drop like that. Arguably, the fall was overdone.

The recent uptick of 14% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Forian

Forian isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, Forian increased its revenue by 128%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 67%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Forian shareholders are down 67% for the year, even worse than the market loss of 13%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 25% 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. 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. Take risks, for example - Forian has 5 warning signs (and 1 which is potentially serious) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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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