Can You Imagine How Alector's (NASDAQ:ALEC) Shareholders Feel About The 65% Share Price Increase?

The Alector, Inc. (NASDAQ:ALEC) share price has had a bad week, falling 14%. But that doesn't change the reality that over twelve months the stock has done really well. Looking at the full year, the company has easily bested an index fund by gaining 65%.

View our latest analysis for Alector

Given that Alector 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. Shareholders of unprofitable companies usually expect strong revenue growth. 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 year Alector saw its revenue grow by 13%. That's not a very high growth rate considering it doesn't make profits. In keeping with the revenue growth, the share price gained 65% in that time. While not a huge gain tht seems pretty reasonable. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Alector stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Alector shareholders should be happy with the total gain of 65% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 36% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Alector better, we need to consider many other factors. Take risks, for example - Alector has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Alector is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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