Stoke Therapeutics (NASDAQ:STOK) pulls back 9.1% this week, but still delivers shareholders solid 136% return over 1 year

Stoke Therapeutics, Inc. (NASDAQ:STOK) shareholders might be concerned after seeing the share price drop 17% in the last quarter. But that doesn't change the fact that the returns over the last year have been very strong. Like an eagle, the share price soared 136% in that time. So some might not be surprised to see the price retrace some. More important, going forward, is how the business itself is going.

In light of the stock dropping 9.1% 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.

View our latest analysis for Stoke Therapeutics

Because Stoke Therapeutics made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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, Stoke Therapeutics' revenue grew by 81%. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 136% in response. It's great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on Stoke Therapeutics' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Stoke Therapeutics has rewarded shareholders with a total shareholder return of 136% in the last twelve months. Notably the five-year annualised TSR loss of 10% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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 Stoke Therapeutics .

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.