When investing in company shares, it is important to consider the risk of potential failure and loss of capital. However, there is also the possibility of significant gains, with some companies seeing their share prices increase by over 100%. One such example is Corcept Therapeutics Incorporated (NASDAQ:CORT), whose stock has risen by an impressive 222% over the last five years, including a 40% gain in the last three months.
Despite adding US$327 million to its market cap in just one week, it is essential to analyze the underlying performance driving these long-term returns. By comparing earnings per share (EPS) with the share price, it becomes evident that market sentiment towards Corcept Therapeutics has improved over the years.
Over a five-year period, the company achieved compound EPS growth of 11% annually, lower than the 26% average annual increase in share price. This indicates that market participants now hold the company in higher regard due to its strong track record of growth. It is crucial to consider other factors such as revenue growth to assess the sustainability of EPS growth.
Shareholders of Corcept Therapeutics have enjoyed a total shareholder return of 43% over the past year, outperforming the annualized return of 26% over five years. With strong share price momentum, investors may want to closely monitor the stock to avoid missing potential opportunities. However, it is essential to conduct a comprehensive analysis considering various factors, including risks and warnings, before making investment decisions.