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While not a mind-blowing move, it is good to see that the Cara Therapeutics, Inc. (NASDAQ:CARA) share price has gained 21% in the last three months. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 31% in the last year, significantly under-performing the market.
Because Cara 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Cara Therapeutics grew its revenue by 32% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 31% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Cara Therapeutics shareholders are down 31% for the year, but the market itself is up 9.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 2.6% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Cara Therapeutics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Cara Therapeutics (of which 1 shouldn't be ignored!) you should know about.
We will like Cara Therapeutics 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.
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. 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.
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