MaxCyte, Inc. (LON:MXCT) shareholders might be concerned after the share price fell 13% last quarter. But that hardly detracts from the really solid long-term returns the company has generated over five years. It’s fair to say that most would be happy with a gain of 166% in that time. Generally speaking, long-term returns give you a better idea of ​​a company’s quality than short-term returns. Of course, that doesn’t necessarily mean the stock is cheap now. Unfortunately, not all shareholders will have held the stock for five years, so think about those who were affected by the 68% decline over the last three years: that’s a long time to wait for profits.

Now it is worth taking a look at the company’s fundamentals, as this is the only way we can determine whether the long-term return for shareholders matches the performance of the underlying business.

Check out our latest analysis for MaxCyte

MaxCyte is not currently profitable, so most analysts would look to revenue growth to get an idea of ​​how fast the underlying business is growing. Generally, when a company is not making a profit, we hope for good revenue growth. Some companies are willing to delay profitability in order to grow revenue faster, but in this case, one would hope for good revenue growth to make up for the lack of profit.

Over the last 5 years, MaxCyte has grown its revenue by 17% per year, which is significantly higher than most companies that are not yet making profits. So it’s not entirely surprising that the share price has reflected this performance, increasing by 22% per year during that time. This suggests that the market has acknowledged the company’s progress. In our opinion, MaxCyte is therefore worth investigating – its best days may still be ahead of it.

The following graph shows how earnings and sales have developed over time (you can find out the exact values ​​by clicking on the graph).

It’s probably worth noting that we saw significant insider buying last quarter, which we view as a positive. However, we think the earnings and revenue growth trends are even more important factors to consider. If you’re thinking about buying or selling MaxCyte stock, you might want to check this out free Report with analysts’ profit forecasts.

A different perspective

MaxCyte shareholders received a total return of 11% over the year. Unfortunately, this is below the market return. It’s probably a good sign that the company has an even better track record over the long term, having provided shareholders with an annual TSR of 22% over five years. Given the market’s sustained positive response over time, it’s quite possible that this is a company worth keeping an eye on. I find it very interesting to look at the share price over the long term as an indicator of company performance. But to really gain insight, we need to consider other information as well. To that end, you should be aware of the following: 1 warning sign we discovered it with MaxCyte.

The story continues

MaxCyte is not the only stock that insiders are buying, so take a look at these free List of small-cap companies with attractive valuations that have been purchased by insiders.

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

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.