Yahoo Finance Shareholders in Travere Therapeutics (NASDAQ:TVTX) are in the red if they invested five years ago
Travere Therapeutics, Inc. (NASDAQ:TVTX) shareholders should be happy to see the share price up 21% in the last month. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. Indeed, the share price is down 64% in the period. So is the recent increase sufficient to restore confidence in the stock? Not yet. We'd err towards caution given the long term under-performance.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
See our latest analysis for Travere Therapeutics
Travere Therapeutics wasn't profitable in the last twelve months, 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. 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 five years Travere Therapeutics saw its revenue shrink by 2.2% per year. That's not what investors generally want to see. The share price decline of 10% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. We don't think anyone is rushing to buy this stock. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Travere Therapeutics is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Travere Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
While the broader market gained around 24% in the last year, Travere Therapeutics shareholders lost 58%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Travere Therapeutics better, we need to consider many other factors. For instance, we've identified 1 warning sign for Travere Therapeutics that you should be aware of.
We will like Travere Therapeutics better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
