BRAIN Biotech (ETR:BNN investor five-year losses grow to 75% as the stock sheds €5.5m this past week

Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held BRAIN Biotech AG (ETR:BNN) for five whole years - as the share price tanked 75%. And some of the more recent buyers are probably worried, too, with the stock falling 24% in the last year. Shareholders have had an even rougher run lately, with the share price down 30% in the last 90 days.

Since BRAIN Biotech has shed €5.5m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Our free stock report includes 1 warning sign investors should be aware of before investing in BRAIN Biotech. Read for free now.

Because BRAIN Biotech made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

In the last half decade, BRAIN Biotech saw its revenue increase by 9.6% per year. That's a fairly respectable growth rate. So the stock price fall of 12% per year seems pretty steep. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling BRAIN Biotech stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in BRAIN Biotech had a tough year, with a total loss of 24%, against a market gain of about 18%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 be aware of the 1 warning sign we've spotted with BRAIN Biotech .

For those who like to find winning investments this free list of undervalued 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 German 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.