While BridgeBio Pharma, Inc. (NASDAQ:BBIO) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 12% in the last quarter. But that doesn’t detract from the splendid returns of the last year. We’re very pleased to report the share price shot up 128% in that time. So we think most shareholders won’t be too upset about the recent fall. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
Given that BridgeBio Pharma 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year BridgeBio Pharma saw its revenue shrink by 80%. We’re a little surprised to see the share price pop 128% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It’s good to see that there was some significant insider buying in the last three months. That’s a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for BridgeBio Pharma in this interactive graph of future profit estimates.
A Different Perspective
BridgeBio Pharma boasts a total shareholder return of 128% for the last year. We regret to report that the share price is down 12% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. 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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with BridgeBio Pharma , and understanding them should be part of your investment process.
BridgeBio Pharma is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. 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.
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