Investing in stocks comes with the risk that the share price will fall. And unfortunately for Assembly Biosciences, Inc. (NASDAQ:ASMB) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 67% in that time. On the bright side, the stock is actually up 53% in the last three years. Furthermore, it's down 24% in about a quarter. That's not much fun for holders.
Because Assembly Biosciences is loss-making, 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. 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.
In the last year Assembly Biosciences saw its revenue grow by 17%. We think that is pretty nice growth. Meanwhile, the share price tanked 67%, suggesting the market had much higher expectations. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Assembly Biosciences's financial health with this free report on its balance sheet.
A Different Perspective
Assembly Biosciences shareholders are down 67% for the year, but the market itself is up 3.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 6.6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. You could get a better understanding of Assembly Biosciences's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like Assembly Biosciences 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.
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