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Does Arvinas' (NASDAQ:ARVN) Share Price Gain of 27% Match Its Business Performance?

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While Arvinas, Inc. (NASDAQ:ARVN) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 29% in the last quarter. But at least the stock is up over the last year. In that time, it is up 27%, which isn't bad, but is below the market return of 57%.

Check out our latest analysis for Arvinas

Given that Arvinas 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

In the last year Arvinas saw its revenue shrink by 49%. Given the revenue reduction the modest 27% share price rise over the year seems pretty decent. We'd want to see progress to profitability before getting too interested in this stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Arvinas in this interactive graph of future profit estimates.

A Different Perspective

Arvinas shareholders have gained 27% for the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 57%. The last three months haven't been great for shareholder returns, since the share price has trailed the market by 37% in the last three months. It might be that investors are more concerned about the business lately due to some fundamental change (or else the share price simply got ahead of itself, previously). 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. Take risks, for example - Arvinas has 3 warning signs we think you should be aware of.

Arvinas is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.