Ardelyx, Inc. (NASDAQ:ARDX) shareholders might be concerned after seeing the share price drop 13% in the last week. But that doesn't displace its brilliant performance over three years. The longer term view reveals that the share price is up 352% in that period. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.

Although Ardelyx has shed US$210m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Ardelyx

Ardelyx 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 desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Ardelyx's revenue trended up 97% each year over three years. That's much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 65% per year, over the same period. Despite the strong run, top performers like Ardelyx have been known to go on winning for decades. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Ardelyx is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Ardelyx stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

We're pleased to report that Ardelyx shareholders have received a total shareholder return of 44% over one year. That's better than the annualised return of 6% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Ardelyx better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Ardelyx you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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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.