The Wave Life Sciences Ltd. (NASDAQ:WVE) share price is down a rather concerning 39% in the last month. But don’t let that distract from the very nice return generated over three years. To wit, the share price did better than an index fund, climbing 86% during that period.
Wave Life Sciences 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 3 years Wave Life Sciences saw its revenue grow at 104% per year. That’s much better than most loss-making companies. While the compound gain of 23% per year over three years is pretty good, you might argue it doesn’t fully reflect the strong revenue growth. If that’s the case, now might be the time to take a close look at Wave Life Sciences. A window of opportunity may reveal itself with time, if the business can trend to profitability.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
If you are thinking of buying or selling Wave Life Sciences stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Wave Life Sciences shareholders are down 43% for the year, but the broader market is up 9.9%. 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 23% per year over three years. Sometimes when a good quality long term winner has a weak period, it’s turns out to be an opportunity, but you really need to be sure that the quality is there. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
But note: Wave Life Sciences 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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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.