Marrone Bio Innovations (NASDAQ:MBII) Shareholders Have Enjoyed A 75% Share Price Gain

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. But Marrone Bio Innovations, Inc. (NASDAQ:MBII) has fallen short of that second goal, with a share price rise of 75% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 30% over the last year.

Check out our latest analysis for Marrone Bio Innovations

Marrone Bio Innovations 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 5 years Marrone Bio Innovations saw its revenue grow at 26% per year. That's well above most pre-profit companies. It's nice to see shareholders have made a profit, but the gain of 12% over the period isn't that impressive compared to the overall market. That's surprising given the strong revenue growth. Arguably this falls in a potential sweet spot - modest share price gains but good top line growth over the long term justifies investigation, in our book.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Marrone Bio Innovations stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Marrone Bio Innovations shareholders have received a total shareholder return of 30% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 12% 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. 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. To that end, you should be aware of the 3 warning signs we've spotted with Marrone Bio Innovations .

Of course Marrone Bio Innovations 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 US exchanges.

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