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Passive investing in index funds can generate returns that roughly match the overall market. But you can do a lot better than that by buying good quality businesses for attractive prices. For example, the Ascendis Pharma A/S (NASDAQ:ASND) share price is up 87% in the last five years, slightly above the market return. We're also happy to report the stock is up a healthy 21% in the last year.
Since it's been a strong week for Ascendis Pharma shareholders, let's have a look at trend of the longer term fundamentals.
Check out our latest analysis for Ascendis Pharma
Given that Ascendis Pharma 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 5 years Ascendis Pharma saw its revenue grow at 60% per year. That's well above most pre-profit companies. It's good to see that the stock has 13%, but not entirely surprising given revenue shows strong growth. If you think there could be more growth to come, now might be the time to take a close look at Ascendis Pharma. Opportunity lies where the market hasn't fully priced growth in the underlying business.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Ascendis Pharma is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Ascendis Pharma provided a TSR of 21% over the year. That's fairly close to the broader market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 13%. 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 learn about the 2 warning signs we've spotted with Ascendis Pharma (including 1 which is concerning) .
Of course Ascendis Pharma 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 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.