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ImmunoPrecise Antibodies Ltd. (CVE:IPA) shareholders might understandably be very concerned that the share price has dropped 46% in the last quarter. In contrast the stock is up over the last three years. Arguably you'd have been better off buying an index fund, because the gain of 23% in three years isn't amazing.
Because ImmunoPrecise Antibodies 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 3 years ImmunoPrecise Antibodies saw its revenue grow at 36% per year. That's much better than most loss-making companies. While the compound gain of 7% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at ImmunoPrecise Antibodies. If the company is trending towards profitability then it could be very interesting.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
Over the last year ImmunoPrecise Antibodies shareholders have received a TSR of 2.0%. While you don't go broke making a profit, this return was actually lower than the average market return of about 30%. But the (superior) three-year TSR of 7% per year is some consolation. Even the best companies don't see strong share price performance every year. 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. Case in point: We've spotted 4 warning signs for ImmunoPrecise Antibodies you should be aware of, and 1 of them is concerning.
ImmunoPrecise Antibodies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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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