The Botanix Pharmaceuticals (ASX:BOT) Share Price Has Gained 81% And Shareholders Are Hoping For More

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Botanix Pharmaceuticals Limited (ASX:BOT) share price is up 81% in the last year, clearly besting the market decline of around 0.6% (not including dividends). That's a solid performance by our standards! And shareholders have also done well over the long term, with an increase of 31% in the last three years.

Check out our latest analysis for Botanix Pharmaceuticals

Botanix Pharmaceuticals isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. 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 Botanix Pharmaceuticals saw its revenue grow by 61%. That's stonking growth even when compared to other loss-making stocks. While the share price gain of 81% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Botanix Pharmaceuticals in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

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

This free interactive report on Botanix Pharmaceuticals' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Botanix Pharmaceuticals rewarded shareholders with a total shareholder return of 81% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 9%. Given the track record of solid returns over varying time frames, it might be worth putting Botanix Pharmaceuticals on your watchlist. 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. Case in point: We've spotted 2 warning signs for Botanix Pharmaceuticals you should be aware of, and 1 of them can't be ignored.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

When trading Botanix Pharmaceuticals or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.