Eiger BioPharmaceuticals (NASDAQ:EIGR investor five-year losses grow to 55% as the stock sheds US$36m this past week
Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. For example the Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) share price dropped 55% over five years. We certainly feel for shareholders who bought near the top. And it's not just long term holders hurting, because the stock is down 24% in the last year. The falls have accelerated recently, with the share price down 44% in the last three months.
After losing 14% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
See our latest analysis for Eiger BioPharmaceuticals
Given that Eiger BioPharmaceuticals 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last half decade, Eiger BioPharmaceuticals saw its revenue increase by 89% per year. That's well above most other pre-profit companies. In contrast, the share price is has averaged a loss of 9% per year - that's quite disappointing. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we'd consider the stock to be quite an interesting prospect if the company has a clear path to profitability.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
The total return of 24% received by Eiger BioPharmaceuticals shareholders over the last year isn't far from the market return of -23%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 9% per year over the last five years. Weak performance over the long term usually destroys market confidence in a stock, but bargain hunters may want to take a closer look for signs of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Eiger BioPharmaceuticals , and understanding them should be part of your investment process.
We will like Eiger BioPharmaceuticals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.
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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.
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