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If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Inovio Pharmaceuticals, Inc. (NASDAQ:INO) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 58% drop in the share price over that period. Shareholders have had an even rougher run lately, with the share price down 15% in the last 90 days.
Inovio Pharmaceuticals isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 three years Inovio Pharmaceuticals saw its revenue shrink by 5.8% per year. That is not a good result. The share price decline of 25% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Of course, it's the future that will determine whether today's price is a good one. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
This free interactive report on Inovio Pharmaceuticals's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market gained around 6.3% in the last year, Inovio Pharmaceuticals shareholders lost 11%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 15% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. If you would like to research Inovio Pharmaceuticals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course Inovio Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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