It is doubtless a positive to see that the Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) share price has gained some 33% in the last three months. But that's small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 68% in that time. The share price recovery is not so impressive when you consider the fall. Of course, it could be that the fall was overdone.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unfortunately Atea Pharmaceuticals reported an EPS drop of 2.5% for the last year. The share price decline of 68% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
We doubt Atea Pharmaceuticals shareholders are happy with the loss of 68% over twelve months. That falls short of the market, which lost 16%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 33% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. It's always interesting to track share price performance over the longer term. But to understand Atea Pharmaceuticals better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Atea Pharmaceuticals you should know about.
Atea Pharmaceuticals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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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.