OliX Pharmaceuticals (KOSDAQ:226950 shareholders incur further losses as stock declines 19% this week, taking three-year losses to 56%

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the last three years have been particularly tough on longer term OliX Pharmaceuticals, Inc (KOSDAQ:226950) shareholders. Regrettably, they have had to cope with a 56% drop in the share price over that period. Furthermore, it's down 42% in about a quarter. That's not much fun for holders.

Since OliX Pharmaceuticals has shed ₩62b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for OliX Pharmaceuticals

OliX Pharmaceuticals wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

Over three years, OliX Pharmaceuticals grew revenue at 47% per year. That is faster than most pre-profit companies. In contrast, the share price is down 16% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on OliX Pharmaceuticals' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Although it hurts that OliX Pharmaceuticals returned a loss of 0.9% in the last twelve months, the broader market was actually worse, returning a loss of 2.4%. Of far more concern is the 3% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with OliX Pharmaceuticals (at least 3 which can't be ignored) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean 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.