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While shareholders of Teva Pharmaceutical Industries (NYSE:TEVA) are in the black over 3 years, those who bought a week ago aren't so fortunate

Simply Wall St · 06/17 14:06

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For instance the Teva Pharmaceutical Industries Limited (NYSE:TEVA) share price is 127% higher than it was three years ago. How nice for those who held the stock! Unfortunately, though, the stock has dropped 3.2% over a week.

While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

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Because Teva Pharmaceutical Industries 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Teva Pharmaceutical Industries' revenue trended up 3.6% each year over three years. That's not a very high growth rate considering it doesn't make profits. In comparison, the share price rise of 31% per year over the last three years is pretty impressive. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It seems likely that the market is pretty optimistic about Teva Pharmaceutical Industries, given it is losing money.

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

earnings-and-revenue-growth
NYSE:TEVA Earnings and Revenue Growth June 17th 2025

Teva Pharmaceutical Industries is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Teva Pharmaceutical Industries stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

Teva Pharmaceutical Industries shareholders are up 2.2% for the year. But that was short of the market average. On the bright side, the longer term returns (running at about 6% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

We will like Teva Pharmaceutical Industries better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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