Yahoo Finance Seres Therapeutics (NASDAQ:MCRB shareholders incur further losses as stock declines 12% this week, taking one-year losses to 87%
It's not a secret that every investor will make bad investments, from time to time. But it should be a priority to avoid stomach churning catastrophes, wherever possible. We wouldn't blame Seres Therapeutics, Inc. (NASDAQ:MCRB) shareholders if they were still in shock after the stock dropped like a lead balloon, down 87% in just one year. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. On the bright side, the stock is actually up 6.9% in the last three years. Furthermore, it's down 62% in about a quarter. That's not much fun for holders. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
If the past week is anything to go by, investor sentiment for Seres Therapeutics isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for Seres Therapeutics
Given that Seres Therapeutics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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 twelve months, Seres Therapeutics increased its revenue by 358%. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 87% over twelve months. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, markets do over-react so share price drop may be too harsh.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Seres Therapeutics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We regret to report that Seres Therapeutics shareholders are down 87% for the year. Unfortunately, that's worse than the broader market decline of 20%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% 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. 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. Take risks, for example - Seres Therapeutics has 2 warning signs we think you should be aware of.
We will like Seres Therapeutics better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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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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.
