Investors in Caribou Biosciences (NASDAQ:CRBU) from a year ago are still down 46%, even after 11% gain this past week
It's nice to see the Caribou Biosciences, Inc. (NASDAQ:CRBU) share price up 11% in a week. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 46% in a year, falling short of the returns you could get by investing in an index fund.
On a more encouraging note the company has added US$42m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Check out our latest analysis for Caribou Biosciences
Because Caribou Biosciences 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Caribou Biosciences saw its revenue grow by 59%. That's well above most other pre-profit companies. The share price drop of 46% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Caribou Biosciences' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We doubt Caribou Biosciences shareholders are happy with the loss of 46% over twelve months. That falls short of the market, which lost 20%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 31% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Caribou Biosciences better, we need to consider many other factors. Take risks, for example - Caribou Biosciences has 2 warning signs (and 1 which is significant) we think you should know about.
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 US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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