Pulling back 3.6% this week, Supernus Pharmaceuticals' NASDAQ:SUPN) five-year decline in earnings may be coming into investors focus

It might be of some concern to shareholders to see the Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) share price down 13% in the last month. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 15%, less than the market return of 110%.

In light of the stock dropping 3.6% 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 five-year return.

See our latest analysis for Supernus Pharmaceuticals

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Supernus Pharmaceuticals' earnings per share are down 46% per year, despite strong share price performance over five years.

Since the EPS are down strongly, it seems highly unlikely market participants are looking at EPS to value the company. Given that EPS is down, but the share price is up, it seems clear the market is focussed on other aspects of the business, at the moment.

On the other hand, Supernus Pharmaceuticals' revenue is growing nicely, at a compound rate of 9.7% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

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 Supernus Pharmaceuticals' financial health with this free report on its balance sheet.

A Different Perspective

Supernus Pharmaceuticals shareholders gained a total return of 4.7% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 3% over half a decade This suggests the company might be improving over 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. For example, we've discovered 2 warning signs for Supernus Pharmaceuticals that you should be aware of before investing here.

Of course Supernus Pharmaceuticals 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.