As an investor, mistakes are inevitable. But really big losses can really drag down an overall portfolio. So spare a thought for the long term shareholders of AnaptysBio, Inc. (NASDAQ:ANAB); the share price is down a whopping 75% in the last three years. That'd be enough to cause even the strongest minds some disquiet. Unhappily, the share price slid 1.1% in the last week.
AnaptysBio 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. 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.
Over three years, AnaptysBio grew revenue at 78% per year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 21% a year in the same time period. You'd want to take a close look at the balance sheet, as well as the losses. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on AnaptysBio's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
AnaptysBio shareholders have gained 53% over twelve months. This isn't far from the market return of 58%. Shareholders can take comfort that it's certainly better than the yearly loss of about 21% per year endured over the last three years. The optimist would say that this might be the dawn of a brighter future. 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. For example, we've discovered 3 warning signs for AnaptysBio (1 shouldn't be ignored!) that you should be aware of before investing here.
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 US exchanges.
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