When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Sonida Senior Living, Inc. (NYSE:SNDA) share price has soared 229% return in just a single year. It's also up 30% in about a month. Having said that, the longer term returns aren't so impressive, with stock gaining just 15% in three years.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

Check out our latest analysis for Sonida Senior Living

Sonida Senior Living 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Sonida Senior Living grew its revenue by 8.1% last year. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 229%. The business will need a lot more growth to justify that increase. We're not so sure that revenue growth is driving the market optimism about the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Sonida Senior Living's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Sonida Senior Living shareholders have received a total shareholder return of 229% over the last year. Notably the five-year annualised TSR loss of 10% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Sonida Senior Living better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Sonida Senior Living you should be aware of.