Swelling losses haven't held back gains for Arrowhead Pharmaceuticals (NASDAQ:ARWR) shareholders since they're up 99% over 5 years
It hasn't been the best quarter for Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) shareholders, since the share price has fallen 28% in that time. But that doesn't change the fact that the returns over the last five years have been pleasing. It has returned a market beating 99% in that time. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 39% drop, in the last year.
Although Arrowhead Pharmaceuticals has shed US$291m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
View our latest analysis for Arrowhead Pharmaceuticals
Because Arrowhead Pharmaceuticals 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last 5 years Arrowhead Pharmaceuticals saw its revenue grow at 30% per year. Even measured against other revenue-focussed companies, that's a good result. It's good to see that the stock has 15%, but not entirely surprising given revenue shows strong growth. If the strong revenue growth continues, we'd expect the share price to follow, in time. Of course, you'll have to research the business more fully to figure out if this is an attractive opportunity.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Arrowhead Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Arrowhead Pharmaceuticals shareholders are down 39% for the year, but the market itself is up 4.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 15%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Arrowhead Pharmaceuticals better, we need to consider many other factors. Take risks, for example - Arrowhead Pharmaceuticals has 2 warning signs (and 1 which can't be ignored) we think you should know about.
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.
