Yahoo Finance Announcing: Theratechnologies (TSE:TH) Stock Rocketed An Astounding 1385% In The Last Five Years
While Theratechnologies Inc. (TSE:TH) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 19% in the last quarter. But over five years returns have been remarkably great. To be precise, the stock price is 1385% higher than it was five years ago, a wonderful performance by any measure. So we don’t think the recent decline in the share price means its story is a sad one. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain.
We love happy stories like this one. The company should be really proud of that performance!
Check out our latest analysis for Theratechnologies
Theratechnologies isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, Theratechnologies can boast revenue growth at a rate of 36% per year. Even measured against other revenue-focussed companies, that’s a good result. Arguably, this is well and truly reflected in the strong share price gain of 72%(per year) over the same period. Despite the strong run, top performers like Theratechnologies have been known to go on winning for decades. So we’d recommend you take a closer look at this one, but keep in mind the market seems optimistic.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
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. You can see what analysts are predicting for Theratechnologies in this interactive graph of future profit estimates.
A Different Perspective
While the broader market gained around 2.9% in the last year, Theratechnologies shareholders lost 27%. 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. Longer term investors wouldn’t be so upset, since they would have made 72%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
