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Did Changing Sentiment Drive Aquestive Therapeutics's (NASDAQ:AQST) Share Price Down By 22%?

Simply Wall St

It is a pleasure to report that the Aquestive Therapeutics, Inc. (NASDAQ:AQST) is up 52% in the last quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 22% in the last year, significantly under-performing the market.

See our latest analysis for Aquestive Therapeutics

Because Aquestive Therapeutics is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

Aquestive Therapeutics's revenue didn't grow at all in the last year. In fact, it fell 16%. That's not what investors generally want to see. The stock price has languished lately, falling 22% in a year. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

NasdaqGM:AQST Income Statement, December 17th 2019
NasdaqGM:AQST Income Statement, December 17th 2019

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Aquestive Therapeutics in this interactive graph of future profit estimates.

A Different Perspective

Given that the market gained 28% in the last year, Aquestive Therapeutics shareholders might be miffed that they lost 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 52% 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. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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.

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. Thank you for reading.