PTC Therapeutics (NASDAQ:PTCT investor five-year losses grow to 27% as the stock sheds US$153m this past week

For many, the main point of investing is to generate higher returns than the overall market. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in PTC Therapeutics, Inc. (NASDAQ:PTCT), since the last five years saw the share price fall 27%. We also note that the stock has performed poorly over the last year, with the share price down 22%. The falls have accelerated recently, with the share price down 17% in the last three months.

After losing 6.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for PTC Therapeutics

PTC Therapeutics 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 hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last half decade, PTC Therapeutics saw its revenue increase by 25% per year. That's well above most other pre-profit companies. The share price drop of 5% per year over five years would be considered let down. You could say that the market has been harsh, given the top line growth. If that's the case, now might be the smart time to take a close look at it.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think PTC Therapeutics will earn in the future (free profit forecasts).

A Different Perspective

Investors in PTC Therapeutics had a tough year, with a total loss of 22%, against a market gain of about 22%. 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. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - PTC Therapeutics has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

PTC Therapeutics is not the only stock that insiders are buying. For those who like to find lesser know companies 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 American 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.