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It is doubtless a positive to see that the scPharmaceuticals Inc. (NASDAQ:SCPH) share price has gained some 38% in the last three months. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 23% in the last year, significantly under-performing the market.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for scPharmaceuticals
scPharmaceuticals wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last twelve months, scPharmaceuticals increased its revenue by 550%. That's well above most other pre-profit companies. The share price drop of 23% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
While the broader market gained around 26% in the last year, scPharmaceuticals shareholders lost 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 2% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand scPharmaceuticals better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for scPharmaceuticals you should know about.