Swelling losses haven't held back gains for Panacea Biotec (NSE:PANACEABIO) shareholders since they're up 62% over 5 years

By
Simply Wall St
Published
November 18, 2021
NSEI:PANACEABIO
Source: Shutterstock

Panacea Biotec Limited (NSE:PANACEABIO) shareholders might understandably be very concerned that the share price has dropped 41% in the last quarter. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 62%, less than the market return of 120%.

Since the long term performance has been good but there's been a recent pullback of 14%, let's check if the fundamentals match the share price.

See our latest analysis for Panacea Biotec

Given that Panacea Biotec 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. 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.

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

earnings-and-revenue-growth
NSEI:PANACEABIO Earnings and Revenue Growth November 19th 2021

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

A Different Perspective

Investors in Panacea Biotec had a tough year, with a total loss of 5.3%, against a market gain of about 54%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 10%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Panacea Biotec better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Panacea Biotec (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

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 IN exchanges.

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