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Is Oramed Pharmaceuticals' (NASDAQ:ORMP) 167% Share Price Increase Well Justified?

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Simply Wall St
·3 min read
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Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) shareholders might be concerned after seeing the share price drop 14% in the last week. Despite this, the stock is a strong performer over the last year, no doubt about that. We're very pleased to report the share price shot up 167% in that time. So we think most shareholders won't be too upset about the recent fall. The real question is whether the business is trending in the right direction.

See our latest analysis for Oramed Pharmaceuticals

Because Oramed Pharmaceuticals made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Oramed Pharmaceuticals saw its revenue shrink by 0.4%. We're a little surprised to see the share price pop 167% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

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

It's nice to see that Oramed Pharmaceuticals shareholders have received a total shareholder return of 167% over the last year. Notably the five-year annualised TSR loss of 0.5% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Oramed Pharmaceuticals better, we need to consider many other factors. Even so, be aware that Oramed Pharmaceuticals is showing 3 warning signs in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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 (at) simplywallst.com.