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G1 Therapeutics (NASDAQ:GTHX) shareholders have endured a 66% loss from investing in the stock three years ago

G1 Therapeutics, Inc. (NASDAQ:GTHX) shareholders should be happy to see the share price up 28% in the last month. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 66% in that time. So it's good to see it climbing back up. The rise has some hopeful, but turnarounds are often precarious.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

View our latest analysis for G1 Therapeutics

Given that G1 Therapeutics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

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Over three years, G1 Therapeutics grew revenue at 136% per year. That is faster than most pre-profit companies. In contrast, the share price is down 18% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

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

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for G1 Therapeutics in this interactive graph of future profit estimates.

A Different Perspective

G1 Therapeutics produced a TSR of 29% over the last year. While you don't go broke making a profit, this return was actually lower than the average market return of about 34%. The silver lining is that the recent rise is far preferable to the annual loss of 18% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. 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. For instance, we've identified 2 warning signs for G1 Therapeutics that you should be aware of.

G1 Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

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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