Investors ignore increasing losses at Alnylam Pharmaceuticals (NASDAQ:ALNY) as stock jumps 7.3% this past week

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) share price has soared 132% in the last three years. How nice for those who held the stock! And in the last week the share price has popped 7.3%. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

Since the stock has added US$2.4b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Alnylam Pharmaceuticals

Because Alnylam Pharmaceuticals made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. 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 three years Alnylam Pharmaceuticals has grown its revenue at 49% annually. That's well above most pre-profit companies. Along the way, the share price gained 32% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Alnylam Pharmaceuticals is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Alnylam Pharmaceuticals in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Alnylam Pharmaceuticals shareholders have received a total shareholder return of 27% over one year. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Take risks, for example - Alnylam Pharmaceuticals has 4 warning signs (and 1 which is significant) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.

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