Such Is Life: How Exicure (NASDAQ:XCUR) Shareholders Saw Their Shares Drop 56%
Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of Exicure, Inc. (NASDAQ:XCUR) have suffered share price declines over the last year. To wit the share price is down 56% in that time. We wouldn't rush to judgement on Exicure because we don't have a long term history to look at. In the last ninety days we've seen the share price slide 63%. But this could be related to the weak market, which is down 26% in the same period.
See our latest analysis for Exicure
We don't think Exicure's revenue of US$1,296,000 is enough to establish significant demand. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. For example, they may be hoping that Exicure comes up with a great new product, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Some Exicure investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Exicure has plenty of cash in the bank, with cash in excess of all liabilities sitting at US$76m, when it last reported (December 2019). This gives management the flexibility to drive business growth, without worrying too much about cash reserves. But since the share price has dropped 56% in the last year , it seems like the market might have been over-excited previously. You can click on the image below to see (in greater detail) how Exicure's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that's for sure. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
Exicure shareholders are down 56% for the year, even worse than the market loss of 16%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Notably, the loss over the last year isn't as bad as the 63% drop in the last three months. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Exicure is showing 6 warning signs in our investment analysis , and 1 of those is potentially serious...
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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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