Does Iovance Biotherapeutics's (NASDAQ:IOVA) Share Price Gain of 75% Match Its Business Performance?

It might be of some concern to shareholders to see the Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) share price down 12% in the last month. But that doesn't change the fact that the returns over the last three years have been pleasing. In fact, the company's share price bested the return of its market index in that time, posting a gain of 75%.

Check out our latest analysis for Iovance Biotherapeutics

With zero revenue generated over twelve months, we don't think that Iovance Biotherapeutics has proved its business plan yet. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Iovance Biotherapeutics 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Iovance Biotherapeutics 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 December 2018, Iovance Biotherapeutics could boast a strong position, with net cash of US$454m. This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 20% per year, over 3 years, the market is focussed on that blue sky potential. You can see in the image below, how Iovance Biotherapeutics's cash and debt levels have changed over time (click to see the values).

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. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this freechart of insider buying (and selling).

A Different Perspective

Investors in Iovance Biotherapeutics had a tough year, with a total loss of 39%, against a market gain of about 8.7%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.2% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Iovance Biotherapeutics by clicking this link.

Iovance Biotherapeutics is not the only stock insiders are buying. So take a peek at this freelist of growing companies with insider buying.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.