When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the Harvard Bioscience, Inc. (NASDAQ:HBIO) share price had more than doubled in just one year – up 150%. On top of that, the share price is up 68% in about a quarter. It is also impressive that the stock is up 40% over three years, adding to the sense that it is a real winner.
Harvard Bioscience isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Harvard Bioscience actually shrunk its revenue over the last year, with a reduction of 5.8%. So we would not have expected the share price to rise 150%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Harvard Bioscience stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It’s good to see that Harvard Bioscience has rewarded shareholders with a total shareholder return of 150% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It’s always interesting to track share price performance over the longer term. But to understand Harvard Bioscience better, we need to consider many other factors. For instance, we’ve identified 3 warning signs for Harvard Bioscience that you should be aware of.
If you are like me, then you will 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.
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.
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