Is Intelligent Ultrasound Group's (LON:IUG) 119% Share Price Increase Well Justified?

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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. To wit, the Intelligent Ultrasound Group plc (LON:IUG) share price has flown 119% in the last three years. How nice for those who held the stock! Unfortunately, though, the stock has dropped 5.6% over a week. It may be that the recent financial results disappointed, so check out the latest revenue and profit numbers on in our company report.'

Check out our latest analysis for Intelligent Ultrasound Group

Intelligent Ultrasound Group 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.

Intelligent Ultrasound Group's revenue trended up 6.6% each year over three years. Considering the company is losing money, we think that rate of revenue growth is uninspiring. In comparison, the share price rise of 30% per year over the last three years is pretty impressive. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It seems likely that the market is pretty optimistic about Intelligent Ultrasound Group, given it is losing money.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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AIM:IUG Earnings and Revenue Growth May 1st 2021

This free interactive report on Intelligent Ultrasound Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Intelligent Ultrasound Group shareholders have received a total shareholder return of 55% over one year. That certainly beats the loss of about 10% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Intelligent Ultrasound Group better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Intelligent Ultrasound Group you should be aware of, and 1 of them can't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.