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Is Mithra Pharmaceuticals's (EBR:MITRA) Share Price Gain Of 209% Well Earned?

Simply Wall St

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. To wit, the Mithra Pharmaceuticals S.A. (EBR:MITRA) share price has flown 209% in the last three years. How nice for those who held the stock!

Check out our latest analysis for Mithra Pharmaceuticals

Mithra Pharmaceuticals isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong 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 3 years Mithra Pharmaceuticals saw its revenue grow at 47% per year. That's much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 46% compound over three years. This suggests the market has recognized the progress the business has made, at least to a significant degree. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

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

ENXTBR:MITRA Income Statement, November 19th 2019

If you are thinking of buying or selling Mithra Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Mithra Pharmaceuticals rewarded shareholders with a total shareholder return of 28% over the last year. That falls short of the 46% it has made, for shareholders, each year, over three years. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

Of course Mithra Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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.

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. Thank you for reading.