Ultragenyx Pharmaceutical's (NASDAQ:RARE) investors will be pleased with their favorable 70% return over the last year

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) share price is up 70% in the last 1 year, clearly besting the market return of around 38% (not including dividends). That's a solid performance by our standards! In contrast, the longer term returns are negative, since the share price is 28% lower than it was three years ago.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for Ultragenyx Pharmaceutical

Ultragenyx Pharmaceutical isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last twelve months, Ultragenyx Pharmaceutical's revenue grew by 19%. We respect that sort of growth, no doubt. Buyers pushed the share price 70% in response, which isn't unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But it's crucial to check profitability and cash flow before forming a view on the future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Ultragenyx Pharmaceutical is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Ultragenyx Pharmaceutical in this interactive graph of future profit estimates.

A Different Perspective

It's good to see that Ultragenyx Pharmaceutical has rewarded shareholders with a total shareholder return of 70% in the last twelve months. That gain is better than the annual TSR over five years, which is 7%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 be aware of the 3 warning signs we've spotted with Ultragenyx Pharmaceutical .

Of course Ultragenyx Pharmaceutical 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 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.