The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) share price has flown 113% in the last three years. How nice for those who held the stock! It's also good to see the share price up 33% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 18% in 90 days).
ACADIA 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. 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 ACADIA Pharmaceuticals saw its revenue grow at 53% per year. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 29% compound over three years. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we'd say ACADIA Pharmaceuticals is still worth investigating - successful businesses can often keep growing for long periods.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
ACADIA Pharmaceuticals is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think ACADIA Pharmaceuticals will earn in the future (free analyst consensus estimates)
A Different Perspective
We're pleased to report that ACADIA Pharmaceuticals shareholders have received a total shareholder return of 109% over one year. That's better than the annualised return of 3.2% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. For instance, we've identified 2 warning signs for ACADIA Pharmaceuticals that you should be aware of.
We will like ACADIA Pharmaceuticals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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.
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