This week we saw the ModivCare Inc. (NASDAQ:MODV) share price climb by 12%. But only the myopic could ignore the astounding decline over three years. The share price has sunk like a leaky ship, down 90% in that time. So it's about time shareholders saw some gains. The thing to think about is whether the business has really turned around. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.

The recent uptick of 12% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for ModivCare

Because ModivCare made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over three years, ModivCare grew revenue at 16% per year. That's a fairly respectable growth rate. So it's hard to believe the share price decline of 24% per year is due to the revenue. It could be that the losses were much larger than expected. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

Investors in ModivCare had a tough year, with a total loss of 66%, against a market gain of about 32%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand ModivCare better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for ModivCare (of which 1 is a bit concerning!) you should know about.

Of course ModivCare may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.