BioMarin Pharmaceutical (NASDAQ:BMRN) stock falls 3.8% in past week as three-year earnings and shareholder returns continue downward trend

For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) shareholders, since the share price is down 18% in the last three years, falling well short of the market return of around 39%. Furthermore, it's down 12% in about a quarter. That's not much fun for holders.

If the past week is anything to go by, investor sentiment for BioMarin Pharmaceutical isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for BioMarin Pharmaceutical

While BioMarin Pharmaceutical made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last three years, BioMarin Pharmaceutical saw its revenue grow by 4.8% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. Indeed, the stock dropped 6% over the last three years. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability.

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling BioMarin Pharmaceutical stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that BioMarin Pharmaceutical shareholders have received a total shareholder return of 18% over the last year. Notably the five-year annualised TSR loss of 0.8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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 BioMarin Pharmaceutical 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 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.