Despite shrinking by US$52m in the past week, Stoke Therapeutics (NASDAQ:STOK) shareholders are still up 175% over 1 year

It hasn't been the best quarter for Stoke Therapeutics, Inc. (NASDAQ:STOK) shareholders, since the share price has fallen 16% in that time. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 175% in that time. So it is important to view the recent reduction in price through that lense. Only time will tell if there is still too much optimism currently reflected in the share price.

In light of the stock dropping 6.7% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

See our latest analysis for Stoke Therapeutics

Stoke 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 desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last twelve months, Stoke Therapeutics' revenue grew by 71%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 175% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's nice to see that Stoke Therapeutics shareholders have received a total shareholder return of 175% over the last year. That certainly beats the loss of about 7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Case in point: We've spotted 2 warning signs for Stoke Therapeutics you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.