BioMarin Pharmaceutical (NASDAQ:BMRN shareholders incur further losses as stock declines 4.9% this week, taking five-year losses to 14%
For many, the main point of investing is to generate higher returns than the overall market. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), since the last five years saw the share price fall 14%. In the last ninety days we've seen the share price slide 14%. However, one could argue that the price has been influenced by the general market, which is down 16% in the same timeframe.
If the past week is anything to go by, investor sentiment for BioMarin Pharmaceutical isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
Check out our latest analysis for BioMarin Pharmaceutical
While BioMarin Pharmaceutical made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Over five years, BioMarin Pharmaceutical grew its revenue at 9.6% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 3% per year, for five years: a poor performance. Those who bought back then clearly believed in stronger growth - and maybe even profits. There is always a big risk of losing money yourself when you buy shares in a company that loses money.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
BioMarin Pharmaceutical is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
It's nice to see that BioMarin Pharmaceutical shareholders have received a total shareholder return of 4.9% over the last year. That certainly beats the loss of about 3% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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 3 warning signs for BioMarin Pharmaceutical that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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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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.
