It hasn't been the best quarter for Exopharm Limited (ASX:EX1) shareholders, since the share price has fallen 11% in that time. But that doesn't change the fact that the returns over the last year have been pleasing. To wit, it had solidly beat the market, up 49%.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
Given that Exopharm 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Exopharm grew its revenue by 58% last year. That's well above most other pre-profit companies. The solid 49% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Exopharm in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Exopharm's earnings, revenue and cash flow.
A Different Perspective
Exopharm shareholders should be happy with the total gain of 49% over the last twelve months. Unfortunately the share price is down 11% over the last quarter. Shorter term share price moves often don't signify much about the business itself. It's always interesting to track share price performance over the longer term. But to understand Exopharm better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Exopharm (including 2 which are a bit unpleasant) .
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.
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