It is doubtless a positive to see that the AC Immune SA (NASDAQ:ACIU) share price has gained some 49% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. Truth be told the share price declined 15% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.
AC Immune isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over three years, AC Immune grew revenue at 18% per year. That's a pretty good rate of top-line growth. Shareholders have seen the share price fall at 5% per year, for three years. This implies the market had higher expectations of AC Immune. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
AC Immune shareholders are up 2.4% for the year. While you don't go broke making a profit, this return was actually lower than the average market return of about 75%. The silver lining is that the recent rise is far preferable to the annual loss of 5% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. 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 2 warning signs for AC Immune you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you decide to trade AC Immune, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.