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Did Changing Sentiment Drive AnaptysBio's (NASDAQ:ANAB) Share Price Down A Worrying 53%?

Simply Wall St

Investing in stocks comes with the risk that the share price will fall. And unfortunately for AnaptysBio, Inc. (NASDAQ:ANAB) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 53% in that time. Because AnaptysBio hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 33% in about a quarter. That's not much fun for holders.

Check out our latest analysis for AnaptysBio

AnaptysBio isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. 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 twelve months, AnaptysBio increased its revenue by 233%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 53%. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

NasdaqGS:ANAB Income Statement, October 20th 2019

AnaptysBio is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think AnaptysBio will earn in the future (free analyst consensus estimates)

A Different Perspective

Given that the market gained 9.3% in the last year, AnaptysBio shareholders might be miffed that they lost 53%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 33% 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. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.