It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Nabriva Therapeutics plc (NASDAQ:NBRV) share price is down 11% in the last year. That contrasts poorly with the market return of 21%. Nabriva Therapeutics may have better days ahead, of course; we've only looked at a one year period. In the last ninety days we've seen the share price slide 24%.
Because Nabriva Therapeutics is loss-making, 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. 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.
Nabriva Therapeutics's revenue didn't grow at all in the last year. In fact, it fell 0.4%. That's not what investors generally want to see. Shareholders have seen the share price drop 11% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
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. If you are thinking of buying or selling Nabriva Therapeutics stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Given that the market gained 21% in the last year, Nabriva Therapeutics shareholders might be miffed that they lost 11%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's worth noting that the last three months did the real damage, with a 24% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Nabriva Therapeutics 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 US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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