It hasn’t been the best quarter for Xencor, Inc. (NASDAQ:XNCR) shareholders, since the share price has fallen 20% in that time. But in three years the returns have been great. In three years the stock price has launched 162% higher: a great result. After a run like that some may not be surprised to see prices moderate. The thing to consider is whether the underlying business is doing well enough to support the current price.
Because Xencor is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 Xencor saw its revenue shrink by 23% per year. So the share price gain of 38% per year is quite surprising. It’s fair to say shareholders are definitely counting on a bright future.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
If you are thinking of buying or selling Xencor stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It’s nice to see that Xencor shareholders have received a total shareholder return of 6.3% over the last year. Having said that, the five-year TSR of 19% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. If you would like to research Xencor in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: Xencor 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.