It hasn't been the best quarter for Celldex Therapeutics, Inc. (NASDAQ:CLDX) shareholders, since the share price has fallen 30% in that time. But that doesn't change the fact that the returns over the last half decade have been spectacular. To be precise, the stock price is 863% 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. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 39% decline over the last three years: that's a long time to wait for profits. It really delights us to see such great share price performance for investors.

In light of the stock dropping 6.1% 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 five-year return.

Celldex Therapeutics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good 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 5 years Celldex Therapeutics saw its revenue grow at 0.6% per year. That's not a very high growth rate considering the bottom line. So shareholders should be pretty elated with the 57% increase per year, in that time. We'll tip our hats to that, any day, but the top-line growth isn't particularly impressive when you compare it to other pre-profit companies. It's not immediately obvious to us why the market has been so enthusiastic about the stock, but a more detailed look at revenue and profit trends might reveal why shareholders are optimistic.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Celldex Therapeutics is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Celldex Therapeutics in this interactive graph of future profit estimates.

A Different Perspective

Celldex Therapeutics provided a TSR of 19% over the last twelve months. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 57% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Celldex Therapeutics better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Celldex Therapeutics you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.