Evolus Inc (NASDAQ:EOLS) shareholders lost 19% as shares fell 11% last week
Although not a stunning decision, it is good to see that the Evolves, Inc. (NASDAQ:EOLS) The stock price has gained 14% in the past three months. But it doesn’t help that the three-year return is less impressive. In fact, the stock price is down 19% over the past three years, well below the market return.
Given that Evolus lost $78 million of its value in the past 7 days, let’s see if the longer-term decline was driven by the company’s economics.
See our latest analysis for Evolus
Evolus has not been profitable for the last twelve months, we are unlikely to see a strong correlation between its share price and its earnings per share (EPS). Income is arguably our second best option. Shareholders of unprofitable companies generally expect strong revenue growth. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.
In three years, Evolus has increased its turnover by 67% per year. It’s faster than most nonprofits. While its earnings have grown, the stock price has fallen at a rate of 6% per year. This appears to be an unlucky outcome for the Holders. It is possible that the previous stock price assumed unrealistic future growth. Before considering a purchase, investors should consider how quickly expenses are growing relative to income.
The image below shows how earnings and income have tracked over time (if you click on the image you can see more details).
Take a closer look at the financial health of Evolus with this free report on its balance sheet.
A different perspective
While it’s never nice to take a loss, Evolus shareholders can rest assured that their loss of 8.4% over the last twelve months was not as bad as the market’s loss of around -20 %. The loss in the last year is greater than the loss of 6% per year over three years. While Baron Rothschild says “to buy when there is blood in the streets, even if the blood is yours”, buyers should carefully examine the data to be sure that the company itself is sound. It is always interesting to follow the evolution of the share price over the long term. But to better understand Evolus, we need to consider many other factors. Even so, know that Evolus shows 3 warning signs in our investment analysis you should know…
But note: Evolus may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.