Investors bid Mirum Pharmaceuticals (NASDAQ:MIRM) up US$65m despite increasing losses YoY, taking one-year return to 17%

By
Simply Wall St
Published
February 19, 2022
NasdaqGM:MIRM
Source: Shutterstock

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) share price is 17% higher than it was a year ago, much better than the market decline of around 0.03% (not including dividends) in the same period. That's a solid performance by our standards! Mirum Pharmaceuticals hasn't been listed for long, so it's still not clear if it is a long term winner.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

See our latest analysis for Mirum Pharmaceuticals

Given that Mirum Pharmaceuticals didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
NasdaqGM:MIRM Earnings and Revenue Growth February 19th 2022

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Mirum Pharmaceuticals stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that Mirum Pharmaceuticals shareholders have gained 17% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 47% in that time. This suggests the company is continuing to win over new investors. 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. For example, we've discovered 3 warning signs for Mirum Pharmaceuticals that you should be aware of before investing here.

Mirum Pharmaceuticals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.