It hasn't been the best quarter for Neurocrine Biosciences, Inc. (NASDAQ:NBIX) shareholders, since the share price has fallen 16% in that time. But that doesn't change the reality that over twelve months the stock has done really well. In that time we've seen the stock easily surpass the market return, with a gain of 28%.
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.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the last year Neurocrine Biosciences grew its earnings per share (EPS) by 70%. This EPS growth is significantly higher than the 28% increase in the share price. So it seems like the market has cooled on Neurocrine Biosciences, despite the growth. Interesting. Of course, with a P/E ratio of 64.60, the market remains optimistic.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Neurocrine Biosciences has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Neurocrine Biosciences' financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Neurocrine Biosciences has rewarded shareholders with a total shareholder return of 28% in the last twelve months. That's better than the annualised return of 4% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before deciding if you like the current share price, check how Neurocrine Biosciences scores on these 3 valuation metrics.
But note: Neurocrine Biosciences may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here