Biotec Pharmacon ASA (OB:BIOTEC) shareholders should be happy to see the share price up 24% in the last quarter. But that doesn't change the fact that the returns over the last half decade have been stomach churning. Indeed, the share price is down a whopping 70% in that time. It's true that the recent bounce could signal the company is turning over a new leaf, but we are not so sure. The fundamental business performance will ultimately determine if the turnaround can be sustained.
Given that Biotec Pharmacon 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. 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 half decade, Biotec Pharmacon saw its revenue increase by 10% per year. That's a fairly respectable growth rate. So it is unexpected to see the stock down 22% per year in the last five years. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Biotec Pharmacon stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that Biotec Pharmacon shareholders have received a total shareholder return of 22% over the last year. Notably the five-year annualised TSR loss of 22% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research Biotec Pharmacon 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, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NO exchanges.
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