If You Had Bought NGM Biopharmaceuticals (NASDAQ:NGM) Shares A Year Ago You'd Have Earned 46% Returns
Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the NGM Biopharmaceuticals, Inc. (NASDAQ:NGM) share price is up 46% in the last year, clearly besting the market return of around 17% (not including dividends). That's a solid performance by our standards! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
See our latest analysis for NGM Biopharmaceuticals
Given that NGM Biopharmaceuticals 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. 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.
In the last year NGM Biopharmaceuticals saw its revenue shrink by 19%. The stock is up 46% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
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. If you are thinking of buying or selling NGM Biopharmaceuticals stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
NGM Biopharmaceuticals boasts a total shareholder return of 46% for the last year. Unfortunately the share price is down 0.7% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It's always interesting to track share price performance over the longer term. But to understand NGM Biopharmaceuticals better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with NGM Biopharmaceuticals (including 1 which is can't be ignored) .
But note: NGM Biopharmaceuticals may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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