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For us, stock picking is in large part the hunt for the truly magnificent stocks. But when you hold the right stock for the right time period, the rewards can be truly huge. For example, the PTC Therapeutics, Inc. (NASDAQ:PTCT) share price is up a whopping 479% in the last three years, a handsome return for long term holders. On top of that, the share price is up 17% in about a quarter.
Therapeutics isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last three years Therapeutics has grown its revenue at 54% annually. That’s well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 80% per year, over the same period. It’s always tempting to take profits after a share price gain like that, but high-growth companies like Therapeutics can sometimes sustain strong growth for many years. In fact, it might be time to put it on your watchlist, if you’re not already familiar with the stock.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
This free interactive report on Therapeutics’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We’re pleased to report that Therapeutics shareholders have received a total shareholder return of 8.1% over one year. However, that falls short of the 10% TSR per annum it has made for shareholders, each year, over five years. If you would like to research Therapeutics in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course Therapeutics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.