Blueprint Medicines Corporation (NASDAQ:BPMC) shareholders might be concerned after seeing the share price drop 24% in the last quarter. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. In fact, the share price is up a full 153% compared to three years ago. It's not uncommon to see a share price retrace a bit, after a big gain. Only time will tell if there is still too much optimism currently reflected in the share price.
Blueprint Medicines isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 3 years Blueprint Medicines saw its revenue grow at 13% per year. That's pretty nice growth. It's fair to say that the market has acknowledged the growth by pushing the share price up 36% per year. It's hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! It would be worth thinking about when profits will flow, since that milestone will attract more attention.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Blueprint Medicines is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Blueprint Medicines in this interactive graph of future profit estimates.
A Different Perspective
Blueprint Medicines produced a TSR of 5.5% over the last year. Unfortunately this falls short of the market return of around 7.7%. At least the longer term returns (running at about 36% a year, are better. Even the best companies don't see strong share price performance every year. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Blueprint Medicines 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.
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