Botanix Pharmaceuticals (ASX:BOT) shareholders have earned a 138% return over the last year

It might be of some concern to shareholders to see the Botanix Pharmaceuticals Limited (ASX:BOT) share price down 17% in the last month. But that doesn't change the fact that the returns over the last year have been very strong. During that period, the share price soared a full 138%. So we think most shareholders won't be too upset about the recent fall. Only time will tell if there is still too much optimism currently reflected in the share price.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

View our latest analysis for Botanix Pharmaceuticals

Botanix Pharmaceuticals isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Botanix Pharmaceuticals saw its revenue grow by 37%. That's a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 138%. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Botanix Pharmaceuticals' earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Botanix Pharmaceuticals shareholders have received a total shareholder return of 138% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Botanix Pharmaceuticals better, we need to consider many other factors. Take risks, for example - Botanix Pharmaceuticals has 4 warning signs (and 1 which is significant) we think you should know about.

Botanix Pharmaceuticals is not the only stock that insiders are buying. For those who like to find winning investments 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 Australian 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.