Nektar Therapeutics' (NASDAQ:NKTR) investors will be pleased with their stellar 130% return over the last year

Nektar Therapeutics (NASDAQ:NKTR) shareholders might be concerned after seeing the share price drop 11% in the last month. But that doesn't detract from the splendid returns of the last year. We're very pleased to report the share price shot up 130% in that time. So it may be that the share price is simply cooling off after a strong rise. More important, going forward, is how the business itself is going.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

See our latest analysis for Nektar Therapeutics

Nektar Therapeutics 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last twelve months, Nektar Therapeutics' revenue grew by 1.5%. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 130%. The business will need a lot more growth to justify that increase. It's quite likely that the market is considering other factors, not just revenue growth.

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

If you are thinking of buying or selling Nektar Therapeutics stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Nektar Therapeutics shareholders have received a total shareholder return of 130% over one year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. 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. For example, we've discovered 3 warning signs for Nektar Therapeutics that you should be aware of before investing here.

We will like Nektar Therapeutics better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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.