Recent 4.8% pullback isn't enough to hurt long-term Adaptive Biotechnologies (NASDAQ:ADPT) shareholders, they're still up 151% over 1 year

Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Adaptive Biotechnologies Corporation (NASDAQ:ADPT) share price had more than doubled in just one year - up 151%. It's also good to see the share price up 43% over the last quarter. But this could be related to the strong market, which is up 18% in the last three months. Having said that, the longer term returns aren't so impressive, with stock gaining just 18% in three years.

In light of the stock dropping 4.8% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Adaptive Biotechnologies 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over the last twelve months, Adaptive Biotechnologies' revenue grew by 8.6%. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 151%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

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

Take a more thorough look at Adaptive Biotechnologies' financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Adaptive Biotechnologies has rewarded shareholders with a total shareholder return of 151% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Adaptive Biotechnologies you should know about.

Of course Adaptive Biotechnologies 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 American exchanges.

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

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.