Investors ignore increasing losses at ICU Medical (NASDAQ:ICUI) as stock jumps 4.1% this past week

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The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the ICU Medical, Inc. (NASDAQ:ICUI) share price is 55% higher than it was a year ago, much better than the market return of around 31% (not including dividends) in the same period. That's a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 26% in three years.

Since the stock has added US$173m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for ICU Medical

Because ICU Medical made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

ICU Medical grew its revenue by 0.5% last year. That's not a very high growth rate considering it doesn't make profits. In keeping with the revenue growth, the share price gained 55% in that time. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
NasdaqGS:ICUI Earnings and Revenue Growth September 20th 2024

Take a more thorough look at ICU Medical's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that ICU Medical has rewarded shareholders with a total shareholder return of 55% in the last twelve months. That gain is better than the annual TSR over five years, which is 3%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - ICU Medical has 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.