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NeoGenomics' (NASDAQ:NEO) Wonderful 433% Share Price Increase Shows How Capitalism Can Build Wealth

Simply Wall St
·3-min read

We think all investors should try to buy and hold high quality multi-year winners. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held NeoGenomics, Inc. (NASDAQ:NEO) shares for the last five years, while they gained 433%. This just goes to show the value creation that some businesses can achieve. And in the last month, the share price has gained -3.5%.

Check out our latest analysis for NeoGenomics

Given that NeoGenomics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

In the last 5 years NeoGenomics saw its revenue grow at 24% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 40%(per year) over the same period. It's never too late to start following a top notch stock like NeoGenomics, 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.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

NeoGenomics is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for NeoGenomics in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that NeoGenomics shareholders have received a total shareholder return of 77% over one year. That gain is better than the annual TSR over five years, which is 40%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 2 warning signs for NeoGenomics you should be aware of.

Of course NeoGenomics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.