Recent 7.2% pullback isn't enough to hurt long-term BeiGene (NASDAQ:BGNE) shareholders, they're still up 60% over 5 years

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If you buy and hold a stock for many years, you'd hope to be making a profit. Furthermore, you'd generally like to see the share price rise faster than the market. But BeiGene, Ltd. (NASDAQ:BGNE) has fallen short of that second goal, with a share price rise of 60% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 40% over the last year.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

Check out our latest analysis for BeiGene

BeiGene 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, BeiGene can boast revenue growth at a rate of 43% per year. That's well above most pre-profit companies. It's nice to see shareholders have made a profit, but the gain of 10% over the period isn't that impressive compared to the overall market. You could argue the market is still pretty skeptical, given the growing revenues. Arguably this falls in a potential sweet spot - modest share price gains but good top line growth over the long term justifies investigation, in our book.

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
earnings-and-revenue-growth

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

A Different Perspective

BeiGene provided a TSR of 40% over the year. That's fairly close to the broader market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 10% per year. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. It's always interesting to track share price performance over the longer term. But to understand BeiGene better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for BeiGene you should be aware of.

But note: BeiGene may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).