Increasing losses over three years doesn't faze Xencor (NASDAQ:XNCR) investors as stock ascends 8.7% this past week

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Xencor, Inc. (NASDAQ:XNCR) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 53% drop in the share price over that period. The more recent news is of little comfort, with the share price down 24% in a year. More recently, the share price has dropped a further 9.7% in a month.

While the stock has risen 8.7% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for Xencor

Xencor 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. 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, Xencor's revenue dropped 3.8% per year. That's not what investors generally want to see. The share price decline of 15% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Xencor is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Xencor in this interactive graph of future profit estimates.

A Different Perspective

Investors in Xencor had a tough year, with a total loss of 24%, against a market gain of about 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Xencor better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Xencor you should be aware of.

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 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.