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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Amicus Therapeutics, Inc. (NASDAQ:FOLD) share price is down 32% in the last year. That's disappointing when you consider the market returned 23%. At least the damage isn't so bad if you look at the last three years, since the stock is down 14% in that time. The falls have accelerated recently, with the share price down 13% in the last three months.
Since Amicus Therapeutics has shed US$84m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
View our latest analysis for Amicus Therapeutics
Given that Amicus 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. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Amicus Therapeutics grew its revenue by 33% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 32%. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Amicus Therapeutics is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Amicus Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
Investors in Amicus Therapeutics had a tough year, with a total loss of 32%, against a market gain of about 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. You could get a better understanding of Amicus Therapeutics' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.