Seres Therapeutics (NASDAQ:MCRB shareholders incur further losses as stock declines 14% this week, taking one-year losses to 74%

The art and science of stock market investing requires a tolerance for losing money on some of the shares you buy. But it's not unreasonable to try to avoid truly shocking capital losses. So spare a thought for the long term shareholders of Seres Therapeutics, Inc. (NASDAQ:MCRB); the share price is down a whopping 74% in the last twelve months. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. However, the longer term returns haven't been so bad, with the stock down 29% in the last three years. More recently, the share price has dropped a further 31% in a month.

With the stock having lost 14% 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 Seres Therapeutics

Given that Seres Therapeutics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

Seres Therapeutics grew its revenue by 336% over the last year. That's a strong result which is better than most other loss making companies. So the hefty 74% share price crash makes us think the company has somehow offended market participants. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, markets do over-react so share price drop may be too harsh.

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

While the broader market lost about 4.6% in the twelve months, Seres Therapeutics shareholders did even worse, losing 74%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% 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. It's always interesting to track share price performance over the longer term. But to understand Seres Therapeutics better, we need to consider many other factors. Take risks, for example - Seres Therapeutics has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.