Ocular Therapeutix, Inc. (NASDAQ:OCUL) shareholders have seen the share price descend 19% over the month. But that isn't a problem when you consider how the share price has soared over the last year. In that time, shareholders have had the pleasure of a 302% boost to the share price. So we wouldn't blame sellers for taking some profits. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).
Although Ocular Therapeutix has shed US$291m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Because Ocular Therapeutix made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last twelve months, Ocular Therapeutix's revenue grew by 6.5%. That's not a very high growth rate considering it doesn't make profits. So the 302% gain in just twelve months is completely unexpected. We're happy that investors have made money, but we can't help questioning whether the rise is sustainable. It just goes to show that big money can be made if you buy the right stock early.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Ocular Therapeutix's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Ocular Therapeutix shareholders have received a total shareholder return of 302% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 24% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Ocular Therapeutix (of which 1 can't be ignored!) you should know about.
Of course Ocular Therapeutix may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.
