Shareholders in Tarsus Pharmaceuticals (NASDAQ:TARS) are in the red if they invested a year ago
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) share price is down 31% in the last year. That falls noticeably short of the market decline of around 9.8%. Tarsus Pharmaceuticals may have better days ahead, of course; we've only looked at a one year period. More recently, the share price has dropped a further 18% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Tarsus Pharmaceuticals
Tarsus Pharmaceuticals 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 just one year Tarsus Pharmaceuticals saw its revenue fall by 55%. That looks like a train-wreck result to investors far and wide. Meanwhile, the share price dropped by 31%. It's always work digging deeper, but we'd probably need to see a strong balance sheet and bottom line improvements to get interested in this one.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Tarsus Pharmaceuticals
A Different Perspective
Tarsus Pharmaceuticals shareholders are down 31% for the year, even worse than the market loss of 9.8%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 16% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Tarsus Pharmaceuticals you should know about.
Tarsus Pharmaceuticals is not the only stock that insiders are buying. 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 American 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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