ANI Pharmaceuticals (NASDAQ:ANIP) delivers shareholders respectable 12% CAGR over 3 years, surging 6.2% in the last week alone

By buying an index fund, you can roughly match the market return with ease. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) shareholders have seen the share price rise 42% over three years, well in excess of the market return (27%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 3.4%.

Since the stock has added US$65m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for ANI Pharmaceuticals

ANI Pharmaceuticals isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong 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.

In the last 3 years ANI Pharmaceuticals saw its revenue grow at 35% per year. That's much better than most loss-making companies. While the compound gain of 12% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put ANI Pharmaceuticals on your radar. A window of opportunity may reveal itself with time, if the business can trend to profitability.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

ANI Pharmaceuticals shareholders gained a total return of 3.4% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 1.3% endured over half a decade. It could well be that the business is stabilizing. 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 1 warning sign for ANI Pharmaceuticals you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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

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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.