If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) share price is up 69% in the last 1 year, clearly besting the market return of around 20% (not including dividends). So that should have shareholders smiling. Zooming out, the stock is actually down 18% in the last three years.

Since the stock has added US$40m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Cumberland Pharmaceuticals

Given that Cumberland Pharmaceuticals 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Cumberland Pharmaceuticals saw its revenue grow by 4.0%. That's not great considering the company is losing money. The modest growth is probably largely reflected in the share price, which is up 69%. While not a huge gain tht seems pretty reasonable. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Cumberland Pharmaceuticals has rewarded shareholders with a total shareholder return of 69% in the last twelve months. Notably the five-year annualised TSR loss of 1.8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Cumberland Pharmaceuticals better, we need to consider many other factors. Take risks, for example - Cumberland Pharmaceuticals has 3 warning signs (and 1 which can't be ignored) we think you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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.