Nanobiotix (EPA:NANO shareholders incur further losses as stock declines 11% this week, taking three-year losses to 57%

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of Nanobiotix S.A. (EPA:NANO) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 57% drop in the share price over that period. The more recent news is of little comfort, with the share price down 36% in a year. The falls have accelerated recently, with the share price down 38% in the last three months.

Since Nanobiotix has shed €18m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Nanobiotix

Nanobiotix isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. 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 three years, Nanobiotix saw its revenue grow by 103% per year, compound. That's well above most other pre-profit companies. In contrast, the share price is down 16% compound, over three years - disappointing by most standards. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

We regret to report that Nanobiotix shareholders are down 36% for the year. Unfortunately, that's worse than the broader market decline of 0.8%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% 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. It's always interesting to track share price performance over the longer term. But to understand Nanobiotix better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Nanobiotix (at least 1 which is significant) , and understanding them should be part of your investment process.

We will like Nanobiotix better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 French 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.