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On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. Unfortunately for shareholders, while the Legend Biotech Corporation (NASDAQ:LEGN) share price is up 32% in the last year, that falls short of the market return. We'll need to follow Legend Biotech for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Legend Biotech isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Legend Biotech grew its revenue by 29% last year. We respect that sort of growth, no doubt. The share price gain of 32% in that time is better than nothing, but far from outlandish Arguably, the market (previously) expected stronger growth from the company. But this one could be a worth watching - a maiden profit would likely catch the market's attention.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
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
Legend Biotech shareholders have gained 32% for the year. Unfortunately this falls short of the market return of around 39%. However, that falls short of the 69% gain it has made, for shareholders, in the last three months. It's worth taking note when returns accelerate, as it can indicate positive change in the underlying business, and winners often keep winning. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Legend Biotech you should know about.
We will like Legend Biotech 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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