What happened

Shares of Puma Biotechnology (NASDAQ:PBYI) jumped almost 40% last month, according to data from S&P Global Market Intelligence. The company announced full-year 2018 operating results after the market closed on Feb. 28, and shares responded by soaring on the first day of March and then holding the gains for the rest of the month. 

Puma Biotechnology only has one drug on the market or in its pipeline, but it's delivering impressive revenue growth in a limited number of approved indications, and clinical results point to expanded use in the near future. Wall Street has still found reasons to fret, however, as shares of the pharma company are down 45% in the past year. Is the business finally proving stubborn analysts wrong?

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Image source: Getty Images.

So what

The business turned in solid full-year 2018 operating results. Puma Biotechnology reported total revenue of $251 million last year, compared to just $28 million in 2017. The company trimmed its operating loss from $292 million to $95 million in that span, including an operating loss of only $18.6 million in the fourth quarter of 2018.

While sales of its lone drug are expected to continue growing for the foreseeable future -- some analysts expect peak annual sales of $1.2 billion -- Puma Biotechnology has also granted licenses to pharma companies across the globe. Those deals, highlighted by a recent license in European markets (which analysts didn't seem to like), will provide cost-free royalty revenue once regulatory approvals are granted and sales ramp.

Now what

Despite the significant progress made in 2018, shares of Puma Biotechnology trade at just 5.3 times sales. That's a relatively low valuation for a fast-growing pharma business heading toward profitable operations. A lack of respect from Wall Street may be frustrating for shareholders, but if the business continues to execute, then it should be able to earn a market cap north of its current $1.3 billion valuation.

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