Sonida Senior Living (NYSE:SNDA) rallies 9.3% this week, taking three-year gains to 168%

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. For instance the Sonida Senior Living, Inc. (NYSE:SNDA) share price is 168% higher than it was three years ago. How nice for those who held the stock! Better yet, the share price has risen 9.3% in the last week.

Since the stock has added US$53m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Sonida Senior Living 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.

Over the last three years Sonida Senior Living has grown its revenue at 15% annually. That's a very respectable growth rate. Broadly speaking, this solid progress may well be reflected by the healthy share price gain of 39% per year over three years. The business has made good progress on the top line, but the market is extrapolating the growth. It would be worth thinking about when profits will flow, since that milestone will attract more attention.

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

Take a more thorough look at Sonida Senior Living's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Sonida Senior Living shareholders have received a total shareholder return of 42% over the last year. That's better than the annualised return of 4% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of Sonida Senior Living's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.