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Collegium Pharmaceutical, Inc. (NASDAQ:COLL) shareholders might be concerned after seeing the share price drop 20% in the last quarter. But that doesn't change the fact that the returns over the last three years have been very strong. Indeed, the share price is up a very strong 116% in that time. After a run like that some may not be surprised to see prices moderate. If the business can perform well for years to come, then the recent drop could be an opportunity.
Given that Collegium Pharmaceutical 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Collegium Pharmaceutical's revenue trended up 71% each year over three years. That's much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 29% compound over three years. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we'd say Collegium Pharmaceutical is still worth investigating - successful businesses can often keep growing for long periods.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Collegium Pharmaceutical's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Collegium Pharmaceutical shareholders have received a total shareholder return of 44% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5.4% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Case in point: We've spotted 1 warning sign for Collegium Pharmaceutical you should be aware of.
We will like Collegium Pharmaceutical 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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