SpringWorks Therapeutics (NASDAQ:SWTX) shareholders are still up 68% over 5 years despite pulling back 8.7% in the past week

SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) shareholders might be concerned after seeing the share price drop 21% in the last month. On the bright side the share price is up over the last half decade. Unfortunately its return of 68% is below the market return of 113%. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 49% decline over the last three years: that's a long time to wait for profits.

While the stock has fallen 8.7% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for SpringWorks Therapeutics

Because SpringWorks 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years SpringWorks Therapeutics saw its revenue grow at 34% per year. That's well above most pre-profit companies. While long-term shareholders have made money, the 11% per year gain over five years fall short of the market return. You could argue the market is still pretty skeptical, given the growing revenues. It could be that the stock was previously over-priced - but if you're looking for underappreciated growth stocks, these numbers indicate that there might be an opportunity here.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at SpringWorks Therapeutics' financial health with this free report on its balance sheet.

A Different Perspective

SpringWorks Therapeutics provided a TSR of 38% over the year. That's fairly close to the broader market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 11%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with SpringWorks Therapeutics , and understanding them should be part of your investment process.

But note: SpringWorks Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.