The Beauty Health Company (NASDAQ:SKIN) shareholders might understandably be very concerned that the share price has dropped 52% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 33%.
Since it’s been a strong week for Beauty Health shareholders, let’s have a look at trend of the longer term fundamentals.
View our latest analysis for Beauty Health
Beauty Health 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last twelve months, Beauty Health’s revenue grew by 68%. That’s well above most other pre-profit companies. While the share price gain of 33% over twelve months is pretty tasty, you might argue it doesn’t fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Beauty Health in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we’re seeing here?
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Beauty Health is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Beauty Health stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
It’s nice to see that Beauty Health shareholders have gained 33% over the last year. Unfortunately the share price is down 52% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It’s always interesting to track share price performance over the longer term. But to understand Beauty Health better, we need to consider many other factors. For instance, we’ve identified 2 warning signs for Beauty Health (1 can’t be ignored) that you should be aware of.
We will like Beauty Health better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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.