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It hasn't been the best quarter for Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) shareholders, since the share price has fallen 21% in that time. But that doesn't change the fact that the returns over the last three years have been spectacular. The longer term view reveals that the share price is up 872% in that period. So the recent fall doesn't do much to dampen our respect for the business. The share price action could signify that the business itself is dramatically improved, in that time. We love happy stories like this one. The company should be really proud of that performance!
In light of the stock dropping 15% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.
Given that Arcturus Therapeutics Holdings 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. 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.
In the last 3 years Arcturus Therapeutics Holdings saw its revenue shrink by 25% per year. So it's pretty amazing to see the stock price has zoomed up 113% per year in that time. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. So there is a serious possibility that some holders are counting their chickens before they hatch.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Arcturus Therapeutics Holdings 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 Arcturus Therapeutics Holdings in this interactive graph of future profit estimates.
A Different Perspective
Over the last year, Arcturus Therapeutics Holdings shareholders took a loss of 59%. In contrast the market gained about 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 113% per year, much better than the more recent returns. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track share price performance over the longer term. But to understand Arcturus Therapeutics Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Arcturus Therapeutics Holdings that you should be aware of.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.