The 23% return this week takes Mindset Pharma's (CSE:MSET) shareholders one

Stock Analysis

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the Mindset Pharma Inc. (CSE:MSET) share price is up 43% in the last 1 year, clearly besting the market decline of around 2.8% (not including dividends). So that should have shareholders smiling. We'll need to follow Mindset Pharma for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Mindset Pharma

Given that Mindset Pharma 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Mindset Pharma saw its revenue grow by 243%. That's stonking growth even when compared to other loss-making stocks. The solid 43% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. If that's the case, now might be the time to take a close look at Mindset Pharma. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

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

This free interactive report on Mindset Pharma's balance sheet strength is a great place to start, if you want to investigate the stock further.

Mindset Pharma boasts a total shareholder return of 43% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 109% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. 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. To that end, you should learn about the 7 warning signs we've spotted with Mindset Pharma (including 3 which are significant) .

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 Canadian exchanges.

Find out whether Mindset Pharma is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.

Mindset Pharma Inc. develops and sells psychedelic medicines to treat neurological and psychiatric disorders in Canada.

Limited growth with imperfect balance sheet.