Does AgeX Therapeutics' (NYSEMKT:AGE) Share Price Gain of 14% Match Its Business Performance?

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if you choose that path, you're going to buy some stocks that fall short of the market. Unfortunately for shareholders, while the AgeX Therapeutics, Inc. (NYSEMKT:AGE) share price is up 14% in the last year, that falls short of the market return. AgeX Therapeutics hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for AgeX Therapeutics

With just US$1,912,000 worth of revenue in twelve months, we don't think the market considers AgeX Therapeutics to have proven its business plan. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that AgeX Therapeutics has the funding to invent a new product before too long.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.

AgeX Therapeutics had liabilities exceeding cash by US$6.8m when it last reported in September 2020, according to our data. That puts it in the highest risk category, according to our analysis. So we're surprised to see the stock up 155% in the last year , but we're happy for holders. It's clear more than a few people believe in the potential. The image below shows how AgeX Therapeutics' balance sheet has changed over time; if you want to see the precise values, simply click on the image.

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.

A Different Perspective

AgeX Therapeutics shareholders have gained 14% for the year. The bad news is that's no better than the average market return, which was roughly 22%. However, that falls short of the 70% gain it has made, for shareholders, in the last three months. It's worth taking note when returns accelerate, as it can indicate positive change in the underlying business, and winners often keep winning. 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. Even so, be aware that AgeX Therapeutics is showing 5 warning signs in our investment analysis , and 2 of those are a bit concerning...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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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. 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.
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