Would Shareholders Who Purchased Epizyme's (NASDAQ:EPZM) Stock Year Be Happy With The Share price Today?

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Epizyme, Inc. (NASDAQ:EPZM) share price slid 29% over twelve months. That's disappointing when you consider the market returned 24%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 1.6% in three years. Unhappily, the share price slid 4.5% in the last week.

See our latest analysis for Epizyme

Because Epizyme made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Epizyme saw its revenue fall by 60%. If you think that's a particularly bad result, you're statistically on the money Meanwhile, the share price dropped by 29%. It's always work digging deeper, but we'd probably need to see a strong balance sheet and bottom line improvements to get interested in this one.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Epizyme

A Different Perspective

Investors in Epizyme had a tough year, with a total loss of 29%, against a market gain of about 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. 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 Epizyme better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Epizyme , and understanding them should be part of your investment process.

Epizyme is not the only stock that insiders are buying. 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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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.
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