Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example Travere Therapeutics, Inc. (NASDAQ:TVTX). Its share price is already up an impressive 124% in the last twelve months. It's also good to see the share price up 77% over the last quarter. Unfortunately the longer term returns are not so good, with the stock falling 30% in the last three years.
The past week has proven to be lucrative for Travere Therapeutics investors, so let's see if fundamentals drove the company's one-year performance.
Because Travere Therapeutics 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last twelve months, Travere Therapeutics' revenue grew by 57%. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 124% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Travere Therapeutics is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
It's nice to see that Travere Therapeutics shareholders have received a total shareholder return of 124% over the last year. That gain is better than the annual TSR over five years, which is 7%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 3 warning signs for Travere Therapeutics you should be aware of, and 1 of them shouldn't be ignored.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).
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.
