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Should Neurocrine Biosciences (NASDAQ:NBIX) Be Disappointed With Their 97% Profit?

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Simply Wall St
·3 min read
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While Neurocrine Biosciences, Inc. (NASDAQ:NBIX) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 22% in the last quarter. On the bright side the returns have been quite good over the last half decade. Its return of 97% has certainly bested the market return!

Check out our latest analysis for Neurocrine Biosciences

We don't think that Neurocrine Biosciences's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Neurocrine Biosciences can boast revenue growth at a rate of 73% per year. Even measured against other revenue-focussed companies, that's a good result. While the compound gain of 14% per year is good, it's not unreasonable given the strong revenue growth. If the strong revenue growth continues, we'd expect the share price to follow, in time. Of course, you'll have to research the business more fully to figure out if this is an attractive opportunity.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NasdaqGS:NBIX Income Statement, March 14th 2020
NasdaqGS:NBIX Income Statement, March 14th 2020

Neurocrine Biosciences 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 Neurocrine Biosciences in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Neurocrine Biosciences shareholders have received a total shareholder return of 1.6% over the last year. However, that falls short of the 14% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. 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. For instance, we've identified 3 warning signs for Neurocrine Biosciences that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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.

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. Thank you for reading.