Personalis (NASDAQ:PSNL) delivers shareholders splendid 54% CAGR over 3 years, surging 15% in the last week alone

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Personalis, Inc. (NASDAQ:PSNL) share price is 267% higher than it was three years ago. That sort of return is as solid as granite. And in the last week the share price has popped 15%.

The past week has proven to be lucrative for Personalis investors, so let's see if fundamentals drove the company's three-year performance.

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Personalis 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years Personalis has grown its revenue at 7.0% annually. That's not a very high growth rate considering it doesn't make profits. In contrast, the stock has popped 54% per year in that time - an impressive result. We'd need to take a closer look at the revenue and profit trends to see whether the improvements might justify that sort of increase. It seems likely that the market is pretty optimistic about Personalis, given it is losing money.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Personalis will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that Personalis shareholders have received a total shareholder return of 53% over the last year. Notably the five-year annualised TSR loss of 12% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Personalis better, we need to consider many other factors. Take risks, for example - Personalis has 4 warning signs we think you should be aware of.

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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.