Intervacc (STO:IVACC) delivers shareholders fantastic 107% CAGR over 3 years, surging 12% in the last week alone

By
Simply Wall St
Published
November 12, 2021
OM:IVACC
Source: Shutterstock

Intervacc AB (publ) (STO:IVACC) shareholders might be concerned after seeing the share price drop 19% in the last quarter. But over three years the performance has been really wonderful. In fact, the share price has taken off in that time, up 782%. Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since it's been a strong week for Intervacc shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Intervacc

We don't think Intervacc's revenue of kr9,015,000 is enough to establish significant demand. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Intervacc has the funding to invent a new product before too long.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Intervacc has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.

When it last reported its balance sheet in September 2021, Intervacc had cash in excess of all liabilities of kr112m. While that's nothing to panic about, there is some possibility the company will raise more capital, especially if profits are not imminent. With the share price up 32% per year, over 3 years , the market is seems hopeful about the potential, despite the cash burn. You can click on the image below to see (in greater detail) how Intervacc's cash levels have changed over time.

debt-equity-history-analysis
OM:IVACC Debt to Equity History November 13th 2021

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Given that situation, many of the best investors like to check if insiders have been buying shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.

A Different Perspective

Intervacc shareholders have gained 40% over twelve months. This isn't far from the market return of 42%. It has to be noted that the recent return falls short of the 107% shareholders have gained each year, over the last three years. Share price gains are anything but steady, so it's a positive to see that the longer term returns are reasonable. 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. Case in point: We've spotted 1 warning sign for Intervacc you should be aware of.

But note: Intervacc may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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