Yahoo Finance Shareholders in ICU Medical (NASDAQ:ICUI) are in the red if they invested five years ago
We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. To wit, the ICU Medical, Inc. (NASDAQ:ICUI) share price managed to fall 55% over five long years. That is extremely sub-optimal, to say the least. We also note that the stock has performed poorly over the last year, with the share price down 43%.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
Check out our latest analysis for ICU Medical
ICU Medical 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, ICU Medical grew its revenue at 14% per year. That's a pretty good rate for a long time period. The share price return isn't so respectable with an annual loss of 9% over the period. It seems probably that the business has failed to live up to initial expectations. A pessimistic market can create opportunities.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at ICU Medical's financial health with this free report on its balance sheet.
A Different Perspective
Investors in ICU Medical had a tough year, with a total loss of 43%, against a market gain of about 26%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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 ICU Medical you should be aware of, and 1 of them is concerning.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
