If you love investing in stocks you're bound to buy some losers. But the long term shareholders of UroGen Pharma Ltd. (NASDAQ:URGN) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 64% drop in the share price over that period. Unfortunately the share price momentum is still quite negative, with prices down 26% in thirty days.
UroGen Pharma isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years, UroGen Pharma's revenue dropped 113% per year. That means its revenue trend is very weak compared to other loss making companies. With no profits and falling revenue it is no surprise that investors have been dumping the stock, pushing the price down by 18% per year over that time. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. After losing money on a declining business with falling stock price, we always consider whether eager bagholders are still offering us a reasonable exit price.
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. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for UroGen Pharma in this interactive graph of future profit estimates.
A Different Perspective
UroGen Pharma shareholders are up 4.3% for the year. Unfortunately this falls short of the market return of around 60%. The silver lining is that the recent rise is far preferable to the annual loss of 18% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 4 warning signs we've spotted with UroGen Pharma .
UroGen Pharma is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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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