Shareholders in I-Mab (NASDAQ:IMAB) are in the red if they invested a year ago

It is doubtless a positive to see that the I-Mab (NASDAQ:IMAB) share price has gained some 83% in the last three months. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 70% in that time. The share price recovery is not so impressive when you consider the fall. Arguably, the fall was overdone.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

View our latest analysis for I-Mab

I-Mab 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. 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.

I-Mab's revenue didn't grow at all in the last year. In fact, it fell 92%. That looks like a train-wreck result to investors far and wide. It's no surprise, then, that investors dumped the stock like it was garbage, sending the share price down 70%. Buying shares in companies that lose money, shrink revenue, and see share price declines is unpopular with investors, but popular with speculators (apparently). This company will really need to improve on the numbers before we get excited about it.

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

I-Mab 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 I-Mab in this interactive graph of future profit estimates.

A Different Perspective

The last twelve months weren't great for I-Mab shares, which performed worse than the market, costing holders 70%. The market shed around 7.7%, no doubt weighing on the stock price. The three-year loss of 13% 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. 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. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for I-Mab you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.

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