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Surface Oncology, Inc. (NASDAQ:SURF) shareholders might be concerned after seeing the share price drop 10% in the last week. But that doesn't change the fact that the returns over the last year have been spectacular. In fact, it is up 498% in that time. Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price.
Because Surface Oncology made a loss in the last twelve months, 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last twelve months, Surface Oncology's revenue grew by 59%. That's a head and shoulders above most loss-making companies. But the share price seems headed to the moon, up 498% as previously highlighted. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. But if the share price does moderate a bit, there might be an opportunity for high growth investors.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Surface Oncology's financial health with this free report on its balance sheet.
A Different Perspective
Surface Oncology boasts a total shareholder return of 498% for the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 46%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Surface Oncology (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
We will like Surface Oncology 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.
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. 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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