Even the best stock pickers will make plenty of bad investments. Anyone who held Oxford Nanopore Technologies plc (LON:ONT) over the last year knows what a loser feels like. To wit the share price is down 55% in that time. We wouldn't rush to judgement on Oxford Nanopore Technologies because we don't have a long term history to look at. Furthermore, it's down 14% in about a quarter. That's not much fun for holders.
Since Oxford Nanopore Technologies has shed UK£194m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
Because Oxford Nanopore Technologies made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last twelve months, Oxford Nanopore Technologies increased its revenue by 58%. That's a strong result which is better than most other loss making companies. In contrast the share price is down 55% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
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 probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Oxford Nanopore Technologies stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
We doubt Oxford Nanopore Technologies shareholders are happy with the loss of 55% over twelve months. That falls short of the market, which lost 12%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 14% 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. It's always interesting to track share price performance over the longer term. But to understand Oxford Nanopore Technologies better, we need to consider many other factors. Even so, be aware that Oxford Nanopore Technologies is showing 2 warning signs in our investment analysis , you should know about...
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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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