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Redcare Pharmacy (ETR:RDC) pulls back 4.1% this week, but still delivers shareholders strong 30% CAGR over 5 years


Redcare Pharmacy (ETR:RDC) pulls back 4.1% this week, but still delivers shareholders strong 30% CAGR over 5 years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Redcare Pharmacy NV (ETR:RDC) share price has soared 276% in the last half decade. Most would be very happy with that. But it's down 4.1% in the last week. However, this might be related to the overall market decline of 2.2% in a week.

Although Redcare Pharmacy has shed €122m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Redcare Pharmacy

Redcare Pharmacy 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Redcare Pharmacy saw its revenue grow at 22% per year. Even measured against other revenue-focussed companies, that's a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 30% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes Redcare Pharmacy worth investigating - it may have its best days ahead.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So we recommend checking out this free report showing consensus forecasts

It's good to see that Redcare Pharmacy has rewarded shareholders with a total shareholder return of 35% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 30% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 instance, we've identified 1 warning sign for Redcare Pharmacy that you should be aware of.

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