Regeneron Pharmaceuticals' (NASDAQ:REGN) 19% CAGR outpaced the company's earnings growth over the same three-year period

It might be of some concern to shareholders to see the Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) share price down 10% in the last month. But at least the stock is up over the last three years. In that time, it is up 70%, which isn't bad, but not amazing either.

Since it's been a strong week for Regeneron Pharmaceuticals shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Regeneron Pharmaceuticals

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Regeneron Pharmaceuticals was able to grow its EPS at 59% per year over three years, sending the share price higher. The average annual share price increase of 19% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock. We'd venture the lowish P/E ratio of 9.59 also reflects the negative sentiment around the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It is of course excellent to see how Regeneron Pharmaceuticals has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Regeneron Pharmaceuticals' financial health with this free report on its balance sheet.

A Different Perspective

Regeneron Pharmaceuticals shareholders are down 1.3% for the year, but the market itself is up 32%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 10% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. To that end, you should learn about the 3 warning signs we've spotted with Regeneron Pharmaceuticals (including 2 which are concerning) .

But note: Regeneron Pharmaceuticals 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).

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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