As every investor would know, you don’t hit a homerun every time you swing. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. It must have been painful to be a IsoPlexis Corporation (NASDAQ:ISO) shareholder over the last year, since the stock price plummeted 84% in that time. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. IsoPlexis may have better days ahead, of course; we’ve only looked at a one year period. The falls have accelerated recently, with the share price down 48% in the last three months. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
Since IsoPlexis has shed US$7.9m from its value in the past 7 days, let’s see if the longer term decline has been driven by the business’ economics.
Check out our latest analysis for IsoPlexis
Because IsoPlexis 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. 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.
IsoPlexis grew its revenue by 31% over the last year. We think that is pretty nice growth. Unfortunately, the market wanted something better, given it sent the share price 84% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free report showing analyst forecasts should help you form a view on IsoPlexis
A Different Perspective
We doubt IsoPlexis shareholders are happy with the loss of 84% over twelve months. That falls short of the market, which lost 23%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. With the stock down 48% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. 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. Like risks, for instance. Every company has them, and we’ve spotted 4 warning signs for IsoPlexis (of which 1 doesn’t sit too well with us!) you should know about.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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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Find out whether IsoPlexis is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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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