Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held REGENXBIO Inc. (NASDAQ:RGNX) for five years would be nursing their metaphorical wounds since the share price dropped 71% in that time. And it's not just long term holders hurting, because the stock is down 42% in the last year. Unfortunately the share price momentum is still quite negative, with prices down 28% in thirty days.
If the past week is anything to go by, investor sentiment for REGENXBIO isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
View our latest analysis for REGENXBIO
Given that REGENXBIO 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last half decade, REGENXBIO saw its revenue increase by 18% per year. That's well above most other pre-profit companies. So it's not at all clear to us why the share price sunk 11% throughout that time. It could be that the stock was over-hyped before. While there might be an opportunity here, you'd want to take a close look at the balance sheet strength.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on REGENXBIO's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market gained around 22% in the last year, REGENXBIO shareholders lost 42%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand REGENXBIO better, we need to consider many other factors. For example, we've discovered 2 warning signs for REGENXBIO (1 can't be ignored!) that you should be aware of before investing here.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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.