Investing can be hard but the potential fo an individual stock to pay off big time inspires us. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the Array BioPharma Inc. (NASDAQ:ARRY) share price, which skyrocketed 610% over three years. It's also good to see the share price up 27% over the last quarter.
We love happy stories like this one. The company should be really proud of that performance!
Because Array BioPharma is loss-making, 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 expect to see good 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.
Array BioPharma's revenue trended up 64% each year over three years. That's well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 92% per year, over the same period. Despite the strong run, top performers like Array BioPharma have been known to go on winning for decades. So we'd recommend you take a closer look at this one, or even put it on your watchlist.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Array BioPharma in this interactive graph of future profit estimates.
A Different Perspective
It's nice to see that Array BioPharma shareholders have received a total shareholder return of 62% over the last year. That's better than the annualised return of 41% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Array BioPharma is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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