Unfortunately, investing is risky – companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Arbutus Biopharma Corporation (NASDAQ:ABUS) share price has soared 136% return in just a single year. On top of that, the share price is up 50% in about a quarter. This could be related to the recent financial results, released recently – you can catch up on the most recent data by reading our company report. On the other hand, longer term shareholders have had a tougher run, with the stock falling 4.9% in three years.
Check out our latest analysis for Arbutus Biopharma
Given that Arbutus Biopharma didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. 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.
Arbutus Biopharma grew its revenue by 67% last year. That’s a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 136% in response. It’s great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Arbutus Biopharma’s financial health with this free report on its balance sheet.
A Different Perspective
It’s nice to see that Arbutus Biopharma shareholders have received a total shareholder return of 136% over the last year. Notably the five-year annualised TSR loss of 8.4% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Arbutus Biopharma you should know about.
Of course Arbutus Biopharma may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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