Pieris Pharmaceuticals, Inc. (NASDAQ: PIRS) Shareholders saw the stock price drop 17% during the month. But that doesn’t take away from the very good long-term returns the company generates over five years. It’s fair to say that most would be happy with a 186% gain over that time frame. So while it is never fun to watch a stock price fall, it is important to consider a longer time horizon. The most important question is whether the stock is too cheap or too expensive today.
With that in mind, it’s worth seeing if the underlying fundamentals of the business have been driving long-term performance, or if there are any gaps.
Pieris Pharmaceuticals is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. Some companies are ready to postpone profitability to increase their revenue faster, but in this case, good revenue growth is expected.
Over the past 5 years, Pieris Pharmaceuticals has seen its turnover increase by 28% per year. Even compared to other revenue-driven businesses, this is a good result. It is therefore not entirely surprising that the share price reflects this performance by increasing at a rate of 23% per annum, during this period. So it seems likely that buyers paid attention to the strong revenue growth. Pieris Pharmaceuticals appears to be a high growth stock – so growth investors might want to add it to their watch list.
The company’s revenue and profits (over time) are shown in the image below (click to see exact numbers).
NasdaqCM: PIRS Profits and Revenue Growth October 11, 2021
Take a closer look at Pieris Pharmaceuticals’ financial health with this free report on its balance sheet.
A different perspective
It is nice to see that Pieris Pharmaceuticals shareholders have received a total shareholder return of 117% over the past year. This is better than the annualized return of 23% over half a decade, which implies that the company has been doing better recently. Someone with an optimistic outlook might view the recent improvement in TSR as indicating that the business itself is improving over time. It is always interesting to follow the evolution of stock prices over the long term. But to understand Pieris Pharmaceuticals better, there are many other factors that we need to consider. For example, we discovered 3 warning signs for Pieris Pharmaceuticals which you should know before investing here.
Sure Pieris Pharmaceuticals may not be the best stock to buy. So you might want to see this free collection of growth stocks.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
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