The last three months have been tough on Akebia Therapeutics, Inc. (NASDAQ:AKBA) shareholders, who have seen the share price decline a rather worrying 32%. But that doesn't detract from the splendid returns of the last year. Indeed, the share price is up an impressive 241% in that time. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
Akebia Therapeutics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Akebia Therapeutics actually shrunk its revenue over the last year, with a reduction of 34%. So we would not have expected the share price to rise 241%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Akebia Therapeutics' financial health with this free report on its balance sheet.
We're pleased to report that Akebia Therapeutics shareholders have received a total shareholder return of 241% over one year. That certainly beats the loss of about 13% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Akebia Therapeutics (including 2 which can't be ignored) .
We will like Akebia Therapeutics better if we see some big insider buys. While we wait, check out this free list of growing companies 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.
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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.