Unless you borrow money to invest, the potential losses are limited. But if you pick the right stock, you can make a lot more than 100%. For example, the Clovis Oncology, Inc. (NASDAQ:CLVS) share price had more than doubled in just one year - up 100%. And in the last week the share price has popped 9.6%. In contrast, the longer term returns are negative, since the share price is 92% lower than it was three years ago.
Because Clovis Oncology made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Clovis Oncology saw its revenue grow by 34%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 100%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Clovis Oncology's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Clovis Oncology shareholders have received a total shareholder return of 100% over one year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Clovis Oncology better, we need to consider many other factors. Even so, be aware that Clovis Oncology is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
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.
When trading Clovis Oncology or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.