While it may not be enough for some shareholders, we think it is good to see the Marinus Pharmaceuticals, Inc. (NASDAQ:MRNS) share price up 26% in a single quarter. But that doesn’t change the fact that the returns over the last half decade have been disappointing. Indeed, the share price is down 59% in the period. So we’re not so sure if the recent bounce should be celebrated. But it could be that the fall was overdone.
It’s worthwhile assessing if the company’s economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let’s do just that.
Because Marinus Pharmaceuticals 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. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last half decade, Marinus Pharmaceuticals saw its revenue increase by 92% per year. That’s better than most loss-making companies. Unfortunately for shareholders the share price has dropped 10% per year – disappointing considering the growth. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we’d consider the stock to be quite an interesting prospect if the company has a clear path to profitability.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Marinus Pharmaceuticals is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Marinus Pharmaceuticals will earn in the future (free analyst consensus estimates)
A Different Perspective
We regret to report that Marinus Pharmaceuticals shareholders are down 47% for the year. Unfortunately, that’s worse than the broader market decline of 19%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand Marinus Pharmaceuticals better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Marinus Pharmaceuticals (of which 1 is significant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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. 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.
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