New Zealand markets open in 10 minutes
  • NZX 50

    11,214.49
    -220.33 (-1.93%)
     
  • NZD/USD

    0.5635
    -0.0003 (-0.06%)
     
  • ALL ORDS

    6,696.50
    +29.00 (+0.43%)
     
  • OIL

    78.13
    +1.42 (+1.85%)
     
  • GOLD

    1,636.40
    +3.00 (+0.18%)
     

Shareholders in Harpoon Therapeutics (NASDAQ:HARP) are in the red if they invested three years ago

·3-min read

Harpoon Therapeutics, Inc. (NASDAQ:HARP) shareholders should be happy to see the share price up 16% in the last quarter. But that is meagre solace in the face of the shocking decline over three years. In that time the share price has melted like a snowball in the desert, down 82%. So it's about time shareholders saw some gains. Of course the real question is whether the business can sustain a turnaround. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Harpoon Therapeutics

Harpoon Therapeutics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Over three years, Harpoon Therapeutics grew revenue at 59% per year. That's well above most other pre-profit companies. So why has the share priced crashed 22% per year, in the same time? The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

If you are thinking of buying or selling Harpoon Therapeutics stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Harpoon Therapeutics shareholders are down 78% for the year, falling short of the market return. Meanwhile, the broader market slid about 12%, likely weighing on the stock. The three-year loss of 22% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. Take risks, for example - Harpoon Therapeutics has 5 warning signs (and 2 which are a bit unpleasant) we think you should know about.

But note: Harpoon Therapeutics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here