While Acceleron Pharma Inc. (NASDAQ:XLRN) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 13% in the last quarter. But that shouldn’t obscure the pleasing returns achieved by shareholders over the last three years. In fact, the company’s share price bested the return of its market index in that time, posting a gain of 64%.
Given that Acceleron Pharma didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last 3 years Acceleron Pharma saw its revenue shrink by 25% per year. Despite the lack of revenue growth, the stock has returned 18%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Acceleron Pharma
A Different Perspective
It’s good to see that Acceleron Pharma has rewarded shareholders with a total shareholder return of 13% in the last twelve months. There’s no doubt those recent returns are much better than the TSR loss of 2.4% per year over five years. 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. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Acceleron Pharma better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.