Investors in SI-BONE (NASDAQ:SIBN) a year ago are still down 36%, even after a 9.0% gain last week

It’s easy to match the overall market return by buying an index fund. While individual stocks can be big winners, many others fail to generate satisfactory returns. Unfortunately the SI-BONE, Inc. (NASDAQ:SIBN) stock price fell 36% year-over-year. This is disappointing considering that the market returned 4.8%. Longer-term investors are faring much better, as the stock price has risen 11% in three years. Even worse, it’s down 11% in about a month, which isn’t fun at all. However, we note that the price may have been affected by the broader market, which fell 4.8% over the same period.

Although last week was more reassuring for shareholders, they are still in the red over the past year, so let’s see if the underlying activity was responsible for the decline.

See our latest analysis for SI-BONE

SI-BONE has not been profitable for the last twelve months, we are unlikely to see a strong correlation between its stock price and its earnings per share (EPS). Income is arguably our second best option. When a business is not making a profit, you generally expect to see good revenue growth. As you can imagine, rapid revenue growth, when sustained, often results in rapid profit growth.

Over the last twelve months, SI-BONE has increased its turnover by 23%. That’s certainly a respectable growth rate. Unfortunately, that wasn’t enough to prevent the stock price from falling 36%. This implies that the market expected better growth. However, that is in the past now, and it is the future that matters most.

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

NasdaqGM: SIBN Earnings and Revenue Growth February 11, 2022

Balance sheet strength is critical. It might be interesting to take a look at our free report on the evolution of its financial situation over time.

A different perspective

SI-BONE shareholders are down 36% on the year, but the broader market is up 4.8%. Of course, the long term matters more than the short term, and even big stocks will sometimes have a bad year. Fortunately, the longer-term story is brighter, with total returns averaging around 4% per year over three years. Sometimes when a good quality long term gainer has a weak period it turns out to be an opportunity, but you really need to be sure the quality is there. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 3 warning signs for SI-BONE which you should be aware of before investing here.

But note: SI-BONE may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.