BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) shareholders might be concerned after seeing the share price drop 12% in the last quarter. 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 46%, less than the market return of 65%.
Because BioMarin Pharmaceutical 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
For the last half decade, BioMarin Pharmaceutical can boast revenue growth at a rate of 19% per year. Even measured against other revenue-focussed companies, that’s a good result. It’s nice to see shareholders have made a profit, but the gain of 7.8% 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 how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
BioMarin Pharmaceutical is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
BioMarin Pharmaceutical shareholders gained a total return of 2.0% during the year. But that was short of the market average. On the bright side, the longer term returns (running at about 7.8% a year, over half a decade) look better. It’s quite possible the business continues to execute with prowess, even as the share price gains are slowing. Before spending more time on BioMarin Pharmaceutical it might be wise to click here to see if insiders have been buying or selling shares.
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 US exchanges.
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