Further weakness as ANI Pharmaceuticals (NASDAQ:ANIP) drops 25% this week, taking three-year losses to 59%

By
Simply Wall St
Published
March 21, 2022
NasdaqGM:ANIP
Source: Shutterstock

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) have had an unfortunate run in the last three years. Sadly for them, the share price is down 59% in that time. The more recent news is of little comfort, with the share price down 21% in a year. The falls have accelerated recently, with the share price down 42% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

With the stock having lost 25% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

See our latest analysis for ANI Pharmaceuticals

ANI 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 expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, ANI Pharmaceuticals saw its revenue grow by 1.0% per year, compound. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 17% for the last three years. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.

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
NasdaqGM:ANIP Earnings and Revenue Growth March 21st 2022

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

While the broader market gained around 6.0% in the last year, ANI Pharmaceuticals shareholders lost 21%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand ANI Pharmaceuticals better, we need to consider many other factors. Take risks, for example - ANI Pharmaceuticals has 3 warning signs (and 1 which is potentially serious) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do 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.

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