Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Evolent Health, Inc. (NYSE:EVH) have suffered share price declines over the last year. The share price is down a hefty 69% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 68% lower than three years ago). Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

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Given that Evolent Health didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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 year Evolent Health saw its revenue grow by 30%. We think that is pretty nice growth. Unfortunately it seems investors wanted more, because the share price is down 69% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Evolent Health in this interactive graph of future profit estimates.

A Different Perspective

While the broader market gained around 9.2% in the last year, Evolent Health shareholders lost 69%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Evolent Health is showing 1 warning sign in our investment analysis , you should know about...

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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.