It hasn't been the best quarter for Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shareholders, since the share price has fallen 18% in that time. But at least the stock is up over the last five years. However we are not very impressed because the share price is only up 95%, less than the market return of 121%.
Alnylam Pharmaceuticals 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 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 5 years Alnylam Pharmaceuticals saw its revenue grow at 52% per year. That's well above most pre-profit companies. It's nice to see shareholders have made a profit, but the gain of 14% 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.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Alnylam Pharmaceuticals is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Alnylam Pharmaceuticals will earn in the future (free analyst consensus estimates)
A Different Perspective
Alnylam Pharmaceuticals shareholders are up 13% for the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 14% a year, over half a decade) look better. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. 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 2 warning signs we've spotted with Alnylam Pharmaceuticals .
We will like Alnylam Pharmaceuticals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.
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