If You Had Bought Panacea Biotec (NSE:PANACEABIO) Stock A Year Ago, You Could Pocket A 78% Gain Today

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Panacea Biotec Limited (NSE:PANACEABIO) share price is up 78% in the last year, clearly besting the market return of around 1.4% (not including dividends). So that should have shareholders smiling. Looking back further, the stock price is 48% higher than it was three years ago.

See our latest analysis for Panacea Biotec

Panacea Biotec 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.

In the last year Panacea Biotec saw its revenue grow by 19%. We respect that sort of growth, no doubt. While the share price performed well, gaining 78% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But it's crucial to check profitability and cash flow before forming a view on the future.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Panacea Biotec's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Panacea Biotec shareholders have received a total shareholder return of 78% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4.8% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Panacea Biotec you should know about.

Of course Panacea Biotec 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 IN exchanges.

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This article by Simply Wall St is general in nature. 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.
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