The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Palatin Technologies, Inc. (NYSEMKT:PTN) share price has soared 103% in the last three years. That sort of return is as solid as granite. And in the last month, the share price has gained 17%. We note that Palatin Technologies reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.
We don’t think that Palatin Technologies’s modest trailing twelve month profit has the market’s full attention at the moment. We think revenue is probably a better guide. Generally speaking, companies that are not judged on their (small) profits should be growing revenue quickly. As you can imagine, it’s easy to imagine a fast growing company becoming (potentially very) profitable, but when revenue growth slows, then the potential upside often seems less impressive.
Palatin Technologies’s revenue trended up 47% each year over three years. That’s much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 27% 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 chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
It is of course excellent to see how Palatin Technologies has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Palatin Technologies shareholders are up 3.2% for the year. But that return falls short of the market. On the bright side, that’s still a gain, and it is certainly better than the yearly loss of about 1.2% endured over half a decade. So this might be a sign the business has turned its fortunes around. Before spending more time on Palatin Technologies it might be wise to click here to see if insiders have been buying or selling shares.
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.
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 email@example.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.