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Is Intra-Cellular Therapies' (NASDAQ:ITCI) 195% Share Price Increase Well Justified?

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Simply Wall St
·3 min read
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Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example Intra-Cellular Therapies, Inc. (NASDAQ:ITCI). Its share price is already up an impressive 195% in the last twelve months. It's also good to see the share price up 27% over the last quarter. Also impressive, the stock is up 67% over three years, making long term shareholders happy, too.

Check out our latest analysis for Intra-Cellular Therapies

Given that Intra-Cellular Therapies 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. 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.

Intra-Cellular Therapies grew its revenue by 7,851% last year. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 195% in response. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).


This free interactive report on Intra-Cellular Therapies' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Intra-Cellular Therapies has rewarded shareholders with a total shareholder return of 195% in the last twelve months. That certainly beats the loss of about 8% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for Intra-Cellular Therapies you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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@simplywallst.com.