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While it may not be enough for some shareholders, we think it is good to see the Aptinyx Inc. (NASDAQ:APTX) share price up 19% in a single quarter. But that hardly compensates for the shocking decline over the last twelve months. To wit, the stock has dropped 80% over the last year. So it's not that amazing to see a bit of a bounce. The real question is whether the company can turn around its fortunes.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
Given that Aptinyx 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 just one year Aptinyx saw its revenue fall by 44%. That looks pretty grim, at a glance. The market obviously agrees, since the share price tanked 80%. That's a stern reminder that profitless companies need to grow the top line, at the very least. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Given that the market gained 27% in the last year, Aptinyx shareholders might be miffed that they lost 80%. 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 19% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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.
Aptinyx 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 US exchanges.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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