Neuren Pharmaceuticals (ASX:NEU) delivers shareholders impressive 58% CAGR over 3 years, surging 13% in the last week alone

By
Simply Wall St
Published
March 17, 2022
ASX:NEU
Source: Shutterstock

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. For example, the Neuren Pharmaceuticals Limited (ASX:NEU) share price has soared 297% in the last three years. How nice for those who held the stock! It's also good to see the share price up 24% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

View our latest analysis for Neuren Pharmaceuticals

Given that Neuren Pharmaceuticals 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 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 3 years Neuren Pharmaceuticals saw its revenue shrink by 96% per year. So we wouldn't have expected the share price to gain 58% per year, but it has. It's a good reminder that expectations about the future, not the past history, always impact share prices.

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

earnings-and-revenue-growth
ASX:NEU Earnings and Revenue Growth March 17th 2022

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Neuren Pharmaceuticals stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We're pleased to report that Neuren Pharmaceuticals shareholders have received a total shareholder return of 242% over one year. That's better than the annualised return of 24% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Neuren Pharmaceuticals better, we need to consider many other factors. For example, we've discovered 3 warning signs for Neuren Pharmaceuticals that you should be aware of before investing here.

Neuren Pharmaceuticals is not the only stock that insiders are buying. 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.