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Sol-Gel Technologies (NASDAQ:SLGL) pops 10% this week, taking one-year gains to 278%

Simply Wall St · 09/19 10:31

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Sol-Gel Technologies Ltd. (NASDAQ:SLGL) share price had more than doubled in just one year - up 278%. On top of that, the share price is up 268% in about a quarter. On the other hand, longer term shareholders have had a tougher run, with the stock falling 54% in three years.

Since the stock has added US$6.9m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Sol-Gel Technologies 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Sol-Gel Technologies grew its revenue by 265% last year. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 278% in response. It's great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

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
NasdaqCM:SLGL Earnings and Revenue Growth September 19th 2025

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

It's nice to see that Sol-Gel Technologies shareholders have received a total shareholder return of 278% over the last year. That certainly beats the loss of about 10% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Take risks, for example - Sol-Gel Technologies has 2 warning signs we think you should be aware of.

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