Yahoo Finance Strong week for AbCellera Biologics (NASDAQ:ABCL) shareholders doesn't alleviate pain of one-year loss
It's nice to see the AbCellera Biologics Inc. (NASDAQ:ABCL) share price up 16% in a week. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 14% in one year, under-performing the market.
While the last year has been tough for AbCellera Biologics 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 AbCellera Biologics
AbCellera Biologics 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
AbCellera Biologics' revenue didn't grow at all in the last year. In fact, it fell 63%. If you think that's a particularly bad result, you're statistically on the money Meanwhile, the share price dropped by 14%. We would want to see improvements in the core business, and diminishing losses, before getting too excited about this one.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for AbCellera Biologics in this interactive graph of future profit estimates.
A Different Perspective
While AbCellera Biologics shareholders are down 14% for the year, the market itself is up 1.0%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Notably, the loss over the last year isn't as bad as the 19% drop in the last three months. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. 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 1 warning sign for AbCellera Biologics you should know about.
AbCellera Biologics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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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