Vaccitech plc (NASDAQ:VACC) shareholders should be happy to see the share price up 10% in the last month. But that doesn't change the fact that the returns over the last year have been disappointing. During that time the share price has sank like a stone, descending 69%. Some might say the recent bounce is to be expected after such a bad drop. It may be that the fall was an overreaction.
With the stock having lost 22% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Given that Vaccitech 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, Vaccitech increased its revenue by 248%. That's well above most other pre-profit companies. In contrast the share price is down 69% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Vaccitech stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Vaccitech shareholders are down 69% for the year, even worse than the market loss of 20%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 10.0% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. For instance, we've identified 4 warning signs for Vaccitech (1 shouldn't be ignored) that you should be aware of.
Of course Vaccitech may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.