Investors in Heidelberg Pharma (ETR:HPHA) have seen notable returns of 43% over the past five years

It hasn't been the best quarter for Heidelberg Pharma AG (ETR:HPHA) shareholders, since the share price has fallen 11% in that time. On the bright side the returns have been quite good over the last half decade. Its return of 43% has certainly bested the market return! While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 34% drop, in the last year.

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

View our latest analysis for Heidelberg Pharma

Heidelberg Pharma 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 5 years Heidelberg Pharma saw its revenue grow at 27% per year. Even measured against other revenue-focussed companies, that's a good result. It's good to see that the stock has 7%, but not entirely surprising given revenue shows strong growth. If you think there could be more growth to come, now might be the time to take a close look at Heidelberg Pharma. Opportunity lies where the market hasn't fully priced growth in the underlying business.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Investors in Heidelberg Pharma had a tough year, with a total loss of 34%, against a market gain of about 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Heidelberg Pharma better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Heidelberg Pharma (including 1 which shouldn't be ignored) .

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 German 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.