By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. Just take a look at Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), which is up 99%, over three years, soundly beating the market return of 38% (not including dividends). On the other hand, the returns haven’t been quite so good recently, with shareholders up just 50%.
Given that Pieris 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. 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 does expect good top-line growth.
In the last 3 years Pieris Pharmaceuticals saw its revenue grow at 52% per year. That’s well above most pre-profit companies. The share price rise of 26% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. So now might be the perfect time to put Pieris Pharmaceuticals on your radar. If the company is trending towards profitability then it could be very interesting.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Pieris Pharmaceuticals’s financial health with this free report on its balance sheet.
A Different Perspective
We’re pleased to report that Pieris Pharmaceuticals shareholders have received a total shareholder return of 50% over one year. That gain is better than the annual TSR over five years, which is 8.7%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we’ve spotted with Pieris Pharmaceuticals (including 1 which is makes us a bit uncomfortable) .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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