ACADIA Pharmaceuticals (NASDAQ:ACAD) shareholders have endured a 37% loss from investing in the stock five years ago

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), since the last five years saw the share price fall 37%. And some of the more recent buyers are probably worried, too, with the stock falling 22% in the last year. The share price has dropped 39% in three months.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for ACADIA Pharmaceuticals

ACADIA 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. 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.

In the last half decade, ACADIA Pharmaceuticals saw its revenue increase by 18% per year. That's better than most loss-making companies. Shareholders are no doubt disappointed with the loss of 6%, each year, in that time. So you might argue the ACADIA Pharmaceuticals should get more credit for its rather impressive revenue growth over the period. If that's the case, now might be the smart time to take a close look at it.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth

ACADIA Pharmaceuticals is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think ACADIA Pharmaceuticals will earn in the future (free analyst consensus estimates)

A Different Perspective

ACADIA Pharmaceuticals shareholders are down 22% for the year, but the market itself is up 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of growing companies that insiders are 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.