EyePoint Pharmaceuticals (NASDAQ:EYPT) adds US$78m to market cap in the past 7 days, though investors from five years ago are still down 62%

It's nice to see the EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) share price up 17% in a week. But that doesn't change the fact that the returns over the last half decade have been disappointing. Indeed, the share price is down 62% in the period. So is the recent increase sufficient to restore confidence in the stock? Not yet. Of course, this could be the start of a turnaround.

The recent uptick of 17% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for EyePoint Pharmaceuticals

EyePoint Pharmaceuticals wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last half decade, EyePoint Pharmaceuticals saw its revenue increase by 18% per year. That's well above most other pre-profit companies. Unfortunately for shareholders the share price has dropped 10% per year - disappointing considering the growth. It's safe to say investor expectations are more grounded now. Given the revenue growth we'd consider the stock to be quite an interesting prospect if the company has a clear path to profitability.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for EyePoint Pharmaceuticals in this interactive graph of future profit estimates.

A Different Perspective

EyePoint Pharmaceuticals shareholders gained a total return of 24% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 10% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand EyePoint Pharmaceuticals better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with EyePoint Pharmaceuticals (including 1 which is a bit unpleasant) .

EyePoint Pharmaceuticals is not the only stock that insiders are buying. For those who like to find lesser know companies 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 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.