While it may not be enough for some shareholders, we think it is good to see the Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) share price up 15% in a single quarter. But that’s not enough to compensate for the decline over the last twelve months. During that time the share price has sank like a stone, descending 54%. The share price recovery is not so impressive when you consider the fall. Of course, it could be that the fall was overdone.
Pieris Pharmaceuticals isn’t a profitable company, so 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. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Pieris Pharmaceuticals grew its revenue by 15% over the last year. That’s definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 54% in that time. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn’t enough to just look at revenue, anyway. Always consider when profits will flow.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
This free interactive report on Pieris Pharmaceuticals’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Pieris Pharmaceuticals shareholders are down 54% for the year, but the broader market is up 12%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 13% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. If you would like to research Pieris Pharmaceuticals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.