Arcus Biosciences' (NYSE:RCUS) growing losses don't faze investors as the stock jumps 13% this past week

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. One great example is Arcus Biosciences, Inc. (NYSE:RCUS) which saw its share price drive 117% higher over five years. Also pleasing for shareholders was the 25% gain in the last three months.

The past week has proven to be lucrative for Arcus Biosciences investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Arcus Biosciences

Arcus Biosciences wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last 5 years Arcus Biosciences saw its revenue grow at 31% per year. That's well above most pre-profit companies. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 17% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. Arcus Biosciences seems like a high growth stock - so growth investors might want to add it to their watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

Arcus Biosciences provided a TSR of 5.0% over the last twelve months. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 17% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. 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. Even so, be aware that Arcus Biosciences is showing 2 warning signs in our investment analysis , you should know about...

We will like Arcus Biosciences better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 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.