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When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) stock is up an impressive 127% over the last five years. Better yet, the share price has risen 4.5% in the last week. But this might be partly because the broader market had a good week last week, gaining 2.8%.
Since the stock has added US$68m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
View our latest analysis for BioCryst Pharmaceuticals
BioCryst Pharmaceuticals isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 BioCryst Pharmaceuticals saw its revenue grow at 46% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 18% per year, in that time. So it seems likely that buyers have paid attention to the strong revenue growth. BioCryst Pharmaceuticals seems like a high growth stock - so growth investors might want to add it to their watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. 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 BioCryst Pharmaceuticals
A Different Perspective
BioCryst Pharmaceuticals shareholders have received returns of 27% over twelve months, which isn't far from the general market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 18% per year. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. 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. To that end, you should be aware of the 1 warning sign we've spotted with BioCryst Pharmaceuticals .