If You Had Bought Editas Medicine (NASDAQ:EDIT) Stock Three Years Ago, You Could Pocket A 65% Gain Today

By buying an index fund, investors can approximate the average market return. But if you pick the right individual stocks, you could make more than that. For example, Editas Medicine, Inc. (NASDAQ:EDIT) shareholders have seen the share price rise 65% over three years, well in excess of the market return (38%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 44% in the last year.

Check out our latest analysis for Editas Medicine

Editas Medicine isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Editas Medicine's revenue trended up 26% each year over three years. That's much better than most loss-making companies. The share price rise of 18% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. If that's the case, now might be the time to take a close look at Editas Medicine. A window of opportunity may reveal itself with time, if the business can trend to profitability.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at Editas Medicine's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Editas Medicine shareholders have gained 44% (in total) over the last year. That gain actually surpasses the 18% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Editas Medicine you should be aware of.

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.

This article by Simply Wall St is general in nature. 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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