Intercept Pharmaceuticals (NASDAQ:ICPT) shareholders have endured a 83% loss from investing in the stock five years ago
It is a pleasure to report that the Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) is up 67% in the last quarter. But that doesn't change the fact that the returns over the last half decade have been stomach churning. In fact, the share price has tumbled down a mountain to land 83% lower after that period. While the recent increase might be a green shoot, we're certainly hesitant to rejoice. The real question is whether the business can leave its past behind and improve itself over the years ahead. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Intercept Pharmaceuticals
Because Intercept 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. 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.
Over five years, Intercept Pharmaceuticals grew its revenue at 9.3% per year. That's a fairly respectable growth rate. So it is unexpected to see the stock down 13% per year in the last five years. The market can be a harsh master when your company is losing money and revenue growth disappoints.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Intercept Pharmaceuticals is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Intercept Pharmaceuticals in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Intercept Pharmaceuticals has rewarded shareholders with a total shareholder return of 41% in the last twelve months. That certainly beats the loss of about 13% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. To that end, you should be aware of the 1 warning sign we've spotted with Intercept Pharmaceuticals .
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
