Despite shrinking by US$58m in the past week, Ardelyx (NASDAQ:ARDX) shareholders are still up 275% over 3 years

While Ardelyx, Inc. (NASDAQ:ARDX) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 11% in the last quarter. But that doesn't change the fact that the returns over the last three years have been very strong. In three years the stock price has launched 275% higher: a great result. So the recent fall in the share price should be viewed in that context. If the business can perform well for years to come, then the recent drop could be an opportunity.

Although Ardelyx has shed US$58m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Ardelyx

Ardelyx 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. 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 3 years Ardelyx saw its revenue grow at 97% per year. That's much better than most loss-making companies. Along the way, the share price gained 55% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. Nonetheless, we'd say Ardelyx is still worth investigating - successful businesses can often keep growing for long periods.

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

Ardelyx is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Ardelyx stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

It's good to see that Ardelyx has rewarded shareholders with a total shareholder return of 63% in the last twelve months. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. 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 Ardelyx .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.

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