Revance Therapeutics' (NASDAQ:RVNC) investors will be pleased with their respectable 80% return over the last three years
By buying an index fund, investors can approximate the average market return. But if you pick the right individual stocks, you could make more than that. For example, Revance Therapeutics, Inc. (NASDAQ:RVNC) shareholders have seen the share price rise 80% over three years, well in excess of the market return (27%, not including dividends).
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Revance Therapeutics
Because Revance Therapeutics 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 3 years Revance Therapeutics saw its revenue grow at 109% per year. That's much better than most loss-making companies. While the compound gain of 22% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put Revance Therapeutics on your radar. A window of opportunity may reveal itself with time, if the business can trend to profitability.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Revance Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
While it's never nice to take a loss, Revance Therapeutics shareholders can take comfort that their trailing twelve month loss of 6.8% wasn't as bad as the market loss of around 17%. Longer term investors wouldn't be so upset, since they would have made 1.5%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Revance Therapeutics is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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.
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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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