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.
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).
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.
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.