When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Abeona Therapeutics Inc. (NASDAQ:ABEO) share price has soared 170% in the last 1 year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 56% in about a quarter. In contrast, the longer term returns are negative, since the share price is 90% lower than it was three years ago.
The past week has proven to be lucrative for Abeona Therapeutics investors, so let's see if fundamentals drove the company's one-year performance.
Abeona Therapeutics 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. 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.
Abeona Therapeutics actually shrunk its revenue over the last year, with a reduction of 18%. We're a little surprised to see the share price pop 170% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Abeona Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
We're pleased to report that Abeona Therapeutics shareholders have received a total shareholder return of 170% over one year. That certainly beats the loss of about 14% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Abeona Therapeutics better, we need to consider many other factors. Take risks, for example - Abeona Therapeutics has 3 warning signs we think you should be aware of.
Abeona Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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.