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Imagine Owning ImmunoPrecise Antibodies (CVE:IPA) And Wondering If The 44% Share Price Slide Is Justified

Simply Wall St

While not a mind-blowing move, it is good to see that the ImmunoPrecise Antibodies Ltd. (CVE:IPA) share price has gained 19% in the last three months. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 44% in the last three years, falling well short of the market return.

See our latest analysis for ImmunoPrecise Antibodies

ImmunoPrecise Antibodies isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years, ImmunoPrecise Antibodies saw its revenue grow by 56% per year, compound. That's well above most other pre-profit companies. While its revenue increased, the share price dropped at a rate of 17% per year. That seems like an unlucky result for holders. It seems likely that actual growth fell short of shareholders' expectations. Still, with high hopes now tempered, now might prove to be an opportunity to buy.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

TSXV:IPA Income Statement, January 1st 2020

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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

ImmunoPrecise Antibodies shareholders are down 17% for the year, but the broader market is up 18%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 17% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of ImmunoPrecise Antibodies by clicking this link.

ImmunoPrecise Antibodies 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 CA 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.