nLIGHT, Inc. (NASDAQ:LASR) shareholders might be concerned after seeing the share price drop 17% in the last quarter. Despite this, the stock is a strong performer over the last year, no doubt about that. We're very pleased to report the share price shot up 115% in that time. So it is important to view the recent reduction in price through that lense. More important, going forward, is how the business itself is going.
nLIGHT isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last twelve months, nLIGHT's revenue grew by 26%. That's a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 115%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
nLIGHT is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think nLIGHT will earn in the future (free analyst consensus estimates)
A Different Perspective
Pleasingly, nLIGHT's total shareholder return last year was 115%. That gain actually surpasses the 4% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting nLIGHT on your watchlist. 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 example, we've discovered 2 warning signs for nLIGHT that you should be aware of before investing here.
But note: nLIGHT may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
