These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. For example, the ProQR Therapeutics N.V. (NASDAQ:PRQR) share price is up 88% in the last 1 year, clearly besting the market return of around 30% (not including dividends). So that should have shareholders smiling. In contrast, the longer term returns are negative, since the share price is 61% lower than it was three years ago.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

Check out our latest analysis for ProQR Therapeutics

We don't think ProQR Therapeutics' revenue of €1,756,000 is enough to establish significant demand. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that ProQR Therapeutics has the funding to invent a new product before too long.

We think companies that have neither significant revenues nor profits are pretty high risk. You should be aware that the company needed to issue more shares recently so that it could raise enough money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. ProQR Therapeutics has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.

When it last reported its balance sheet, ProQR Therapeutics had cash in excess of all liabilities. That's not too bad but management decided to raise capital in any case to shore up the balance sheet since the company is not yet breaking even. With the share price up 105% in the last year , the market seems hopeful about the potential with a replenished balance sheet. You can see in the image below, how ProQR Therapeutics' cash levels have changed over time (click to see the values).

In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.

A Different Perspective

It's nice to see that ProQR Therapeutics shareholders have received a total shareholder return of 88% over the last year. That gain is better than the annual TSR over five years, which is 5%. Therefore it seems like sentiment around the company has been positive lately. 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 ProQR Therapeutics better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for ProQR Therapeutics you should know about.

We will like ProQR Therapeutics better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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