Stock Analysis

What Type Of Returns Would Soligenix's(NASDAQ:SNGX) Shareholders Have Earned If They Purchased Their SharesFive Years Ago?

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NasdaqCM:SNGX
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Soligenix, Inc. (NASDAQ:SNGX) shareholders should be happy to see the share price up 17% in the last week. But will that heal all the wounds inflicted over 5 years of declines? Unlikely. Indeed, the share price is down a whopping 78% in that time. It's true that the recent bounce could signal the company is turning over a new leaf, but we are not so sure. The fundamental business performance will ultimately determine if the turnaround can be sustained.

View our latest analysis for Soligenix

We don't think Soligenix's revenue of US$2,723,914 is enough to establish significant demand. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, they may be hoping that Soligenix comes up with a great new product, before it runs out of money.

As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. You should be aware that the company needed to issue more shares recently so that it could raise enough money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Soligenix investors have already had a taste of the bitterness stocks like this can leave in the mouth.

Soligenix only just had cash in excess of all liabilities when it last reported. So it is a good thing that the company has looked to remedy the situation by raising more capital recently. The cash situation might not explain why the share price is down 12% per year, over 5 years. You can click on the image below to see (in greater detail) how Soligenix's cash levels have changed over time.

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NasdaqCM:SNGX Debt to Equity History March 16th 2021

Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? It would bother me, that's for sure. You can click here to see if there are insiders selling.

A Different Perspective

Soligenix shareholders gained a total return of 3.4% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 12% endured over half a decade. So this might be a sign the business has turned its fortunes around. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Soligenix (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

But note: Soligenix may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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What are the risks and opportunities for Soligenix?

Soligenix, Inc., a late-stage biopharmaceutical company, focuses on developing and commercializing products to treat rare diseases in the United States.

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Rewards

  • Revenue is forecast to grow 126.77% per year

Risks

  • Earnings are forecast to decline by an average of 17.4% per year for the next 3 years

  • Makes less than USD$1m in revenue ($858K)

  • Does not have a meaningful market cap ($20M)

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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