Yahoo Finance Even after rising 28% this past week, Burning Rock Biotech (NASDAQ:BNR) shareholders are still down 63% over the past year
It is doubtless a positive to see that the Burning Rock Biotech Limited (NASDAQ:BNR) share price has gained some 47% in the last three months. But that's small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 63% in that time. So the bounce should be viewed in that context. It may be that the fall was an overreaction.
While the last year has been tough for Burning Rock Biotech shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
View our latest analysis for Burning Rock Biotech
Burning Rock Biotech 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, Burning Rock Biotech increased its revenue by 15%. That's definitely a respectable growth rate. Meanwhile, the share price tanked 63%, suggesting the market had much higher expectations. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Burning Rock Biotech's financial health with this free report on its balance sheet.
A Different Perspective
We doubt Burning Rock Biotech shareholders are happy with the loss of 63% over twelve months. That falls short of the market, which lost 15%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 47% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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 2 warning signs for Burning Rock Biotech that you should be aware of.
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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