The one-year returns have been notable for Avidity Biosciences (NASDAQ:RNA) shareholders despite underlying losses increasing
Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Avidity Biosciences, Inc. (NASDAQ:RNA) share price is 50% higher than it was a year ago, much better than the market decline of around 9.1% (not including dividends) in the same period. So that should have shareholders smiling. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
The past week has proven to be lucrative for Avidity Biosciences investors, so let's see if fundamentals drove the company's one-year performance.
View our latest analysis for Avidity Biosciences
Avidity Biosciences wasn't profitable in the last twelve months, 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Avidity Biosciences saw its revenue shrink by 14%. The stock is up 50% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Avidity Biosciences shareholders should be happy with the total gain of 50% over the last twelve months. And the share price momentum remains respectable, with a gain of 76% in the last three months. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Avidity Biosciences better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Avidity Biosciences (including 1 which is significant) .
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.
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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.
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