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It's been a soft week for ChromaDex Corporation (NASDAQ:CDXC) shares, which are down 13%. But that isn't a problem when you consider how the share price has soared over the last year. In fact, it is up 389% in that time. So it is not that surprising to see the stock retrace a little. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).
Although ChromaDex has shed US$73m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Check out our latest analysis for ChromaDex
We don't think that ChromaDex's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
In the last year ChromaDex saw its revenue grow by 10.0%. That's not great considering the company is losing money. So it's truly surprising that the share price rocketed 389% in a single year. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. If you are thinking of buying or selling ChromaDex stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's good to see that ChromaDex has rewarded shareholders with a total shareholder return of 389% in the last twelve months. That's better than the annualised return of 9% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for ChromaDex that you should be aware of.