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Eton Pharmaceuticals, Inc. (NASDAQ:ETON) shareholders might be concerned after seeing the share price drop 18% in the last quarter. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. To wit, it had solidly beat the market, up 74%.
Because Eton Pharmaceuticals 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. 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.
Over the last twelve months, Eton Pharmaceuticals' revenue grew by 2,021%. That's well above most other pre-profit companies. The solid 74% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Eton Pharmaceuticals in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Eton Pharmaceuticals boasts a total shareholder return of 74% for the last year. We regret to report that the share price is down 18% over ninety days. Shorter term share price moves often don't signify much about the business itself. It's always interesting to track share price performance over the longer term. But to understand Eton Pharmaceuticals better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Eton Pharmaceuticals you should know about.
We will like Eton Pharmaceuticals 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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