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Tactile Systems Technology (NASDAQ:TCMD) shareholders are still up 114% over 3 years despite pulling back 7.6% in the past week

Simply Wall St · 01/03 13:34

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For instance the Tactile Systems Technology, Inc. (NASDAQ:TCMD) share price is 114% higher than it was three years ago. Most would be happy with that. On top of that, the share price is up 80% in about a quarter.

While the stock has fallen 7.6% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

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While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Tactile Systems Technology became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NasdaqGM:TCMD Earnings Per Share Growth January 3rd 2026

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Tactile Systems Technology's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Tactile Systems Technology has rewarded shareholders with a total shareholder return of 56% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 8% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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 example, we've discovered 1 warning sign for Tactile Systems Technology that you should be aware of before investing here.

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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.