U.S. markets open in 5 hours 58 minutes
  • S&P Futures

    3,922.25
    -0.25 (-0.01%)
     
  • Dow Futures

    31,974.00
    +58.00 (+0.18%)
     
  • Nasdaq Futures

    13,245.00
    -57.00 (-0.43%)
     
  • Russell 2000 Futures

    2,298.20
    +13.10 (+0.57%)
     
  • Crude Oil

    63.61
    +0.39 (+0.62%)
     
  • Gold

    1,788.00
    -9.90 (-0.55%)
     
  • Silver

    27.86
    +0.00 (+0.00%)
     
  • EUR/USD

    1.2198
    +0.0030 (+0.24%)
     
  • 10-Yr Bond

    1.3890
    0.0000 (0.00%)
     
  • Vix

    21.67
    -1.44 (-6.23%)
     
  • GBP/USD

    1.4142
    +0.0001 (+0.00%)
     
  • USD/JPY

    106.0810
    +0.1990 (+0.19%)
     
  • BTC-USD

    50,093.89
    +218.30 (+0.44%)
     
  • CMC Crypto 200

    1,000.51
    +5.85 (+0.59%)
     
  • FTSE 100

    6,677.21
    +18.24 (+0.27%)
     
  • Nikkei 225

    30,168.27
    +496.57 (+1.67%)
     

Is FibroGen's (NASDAQ:FGEN) 136% Share Price Increase Well Justified?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
  • Oops!
    Something went wrong.
    Please try again later.

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the FibroGen, Inc. (NASDAQ:FGEN) share price has flown 136% in the last three years. How nice for those who held the stock! It's also up 28% in about a month.

View our latest analysis for FibroGen

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, FibroGen moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

NasdaqGS:FGEN Past and Future Earnings, December 17th 2019
NasdaqGS:FGEN Past and Future Earnings, December 17th 2019

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of FibroGen's earnings, revenue and cash flow.

A Different Perspective

FibroGen shareholders are up 20% for the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 12% over half a decade It is possible that returns will improve along with the business fundamentals. Is FibroGen cheap compared to other companies? These 3 valuation measures might help you decide.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.