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While it may not be enough for some shareholders, we think it is good to see the Beam Therapeutics Inc. (NASDAQ:BEAM) share price up 19% in a single quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 55% in the last three years. So the improvement may be a real relief to some. While many would remain nervous, there could be further gains if the business can put its best foot forward.
While the last three years has been tough for Beam Therapeutics shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
Check out our latest analysis for Beam Therapeutics
Given that Beam Therapeutics 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over three years, Beam Therapeutics grew revenue at 81% per year. That's well above most other pre-profit companies. In contrast, the share price is down 16% compound, over three years - disappointing by most standards. This could mean hype has come out of the stock because the losses are concerning investors. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Beam Therapeutics is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
Beam Therapeutics shareholders gained a total return of 3.2% during the year. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 8% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Beam Therapeutics better, we need to consider many other factors. For example, we've discovered 2 warning signs for Beam Therapeutics (1 can't be ignored!) that you should be aware of before investing here.