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While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, Emergent BioSolutions Inc. (NYSE:EBS) has generated a beautiful 365% return in just a single year. Also pleasing for shareholders was the 19% gain in the last three months. Zooming out, the stock is actually down 79% in the last three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
View our latest analysis for Emergent BioSolutions
Because Emergent BioSolutions made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last year Emergent BioSolutions saw its revenue grow by 2.0%. That's not great considering the company is losing money. So it's truly surprising that the share price rocketed 365% in a single year. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. It just goes to show that big money can be made if you buy the right stock early.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Emergent BioSolutions' financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Emergent BioSolutions shareholders have received a total shareholder return of 365% over one year. That certainly beats the loss of about 13% per year over the last half decade. 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. 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 3 warning signs we've spotted with Emergent BioSolutions .
Of course Emergent BioSolutions may not be the best stock to buy. So you may wish to see this free collection of growth stocks.