Yahoo Finance Shareholders in Aurinia Pharmaceuticals (NASDAQ:AUPH) have lost 64%, as stock drops 9.5% this past week
Investing in stocks inevitably means buying into some companies that perform poorly. But the last three years have been particularly tough on longer term Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) shareholders. Unfortunately, they have held through a 64% decline in the share price in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 45% lower in that time. The falls have accelerated recently, with the share price down 13% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
After losing 9.5% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
See our latest analysis for Aurinia Pharmaceuticals
Given that Aurinia Pharmaceuticals 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. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years, Aurinia Pharmaceuticals saw its revenue grow by 45% per year, compound. That is faster than most pre-profit companies. In contrast, the share price is down 18% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Aurinia Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market gained around 28% in the last year, Aurinia Pharmaceuticals shareholders lost 45%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Aurinia Pharmaceuticals that you should be aware of.
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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.
