Is ImmunoGen's (NASDAQ:IMGN) Share Price Gain Of 127% Well Earned?

Simply Wall St
·3-min read

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. For example, the ImmunoGen, Inc. (NASDAQ:IMGN) share price has soared 127% return in just a single year. In more good news, the share price has risen -1.8% in thirty days. Having said that, the longer term returns aren't so impressive, with stock gaining just 1.7% in three years.

See our latest analysis for ImmunoGen

Given that ImmunoGen didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

ImmunoGen grew its revenue by 78% last year. That's well above most other pre-profit companies. And the share price has responded, gaining 127% as we previously mentioned. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

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
earnings-and-revenue-growth

Take a more thorough look at ImmunoGen's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that ImmunoGen has rewarded shareholders with a total shareholder return of 127% in the last twelve months. That certainly beats the loss of about 9% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 3 warning signs for ImmunoGen that you should be aware of before investing here.

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.

This article by Simply Wall St is general in nature. 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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