Intra-Cellular Therapies (NASDAQ:ITCI) delivers shareholders enviable 55% CAGR over 5 years, surging 6.4% in the last week alone

Long term investing can be life changing when you buy and hold the truly great businesses. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) shares for the last five years, while they gained 805%. And this is just one example of the epic gains achieved by some long term investors. And in the last week the share price has popped 6.4%. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since the stock has added US$483m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Intra-Cellular Therapies

Intra-Cellular Therapies 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

For the last half decade, Intra-Cellular Therapies can boast revenue growth at a rate of 67% per year. That's well above most pre-profit companies. Fortunately, the market has not missed this, and has pushed the share price up by 55% per year in that time. Despite the strong run, top performers like Intra-Cellular Therapies have been known to go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Intra-Cellular Therapies is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Intra-Cellular Therapies provided a TSR of 38% over the year. That's fairly close to the broader market return. It has to be noted that the recent return falls short of the 55% shareholders have gained each year, over half a decade. Although the share price growth has slowed, the longer term story points to a business well worth watching. 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 1 warning sign we've spotted with Intra-Cellular Therapies .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.