Introducing Entasis Therapeutics Holdings (NASDAQ:ETTX), The Stock That Dropped 16% In The Last Year
Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX) shareholders over the last year, as the share price declined 16%. That falls noticeably short of the market return of around 30%. Because Entasis Therapeutics Holdings hasn't been listed for many years, the market is still learning about how the business performs. In the last ninety days we've seen the share price slide 25%.
See our latest analysis for Entasis Therapeutics Holdings
Entasis Therapeutics Holdings 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Entasis Therapeutics Holdings grew its revenue by 40% over the last year. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 16%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Entasis Therapeutics Holdings's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 30% in the last year, Entasis Therapeutics Holdings shareholders might be miffed that they lost 16%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Notably, the loss over the last year isn't as bad as the 25% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
