Can You Imagine How Chuffed ArQule’s (NASDAQ:ARQL) Shareholders Feel About Its 228% Share Price Gain?

The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. To wit, the ArQule, Inc. (NASDAQ:ARQL) share price has flown 228% in the last three years. How nice for those who held the stock! Better yet, the share price has risen 66% in the last week.

View our latest analysis for ArQule

Because ArQule is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years ArQule saw its revenue grow at 19% per year. That’s a very respectable growth rate. Broadly speaking, this solid progress may well be reflected by the healthy share price gain of 49% per year over three years. It’s hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! Some investors like to buy in just after a company becomes profitable, since that can be a powerful inflexion point.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

NasdaqGM:ARQL Income Statement, March 8th 2019
NasdaqGM:ARQL Income Statement, March 8th 2019

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It’s nice to see that ArQule shareholders have received a total shareholder return of 206% over the last year. That’s better than the annualised return of 21% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of ArQule by clicking this link.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.