Loss-making Ikena Oncology (NASDAQ:IKNA) sheds a further US$11m, taking total shareholder losses to 22% over 1 year
Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Ikena Oncology, Inc. (NASDAQ:IKNA) share price is down 22% in the last year. That contrasts poorly with the market return of 9.0%. Because Ikena Oncology hasn't been listed for many years, the market is still learning about how the business performs. The share price has dropped 35% in three months.
After losing 11% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
View our latest analysis for Ikena Oncology
Because Ikena Oncology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In just one year Ikena Oncology saw its revenue fall by 43%. That's not what investors generally want to see. The stock price has languished lately, falling 22% in a year. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling Ikena Oncology stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While Ikena Oncology shareholders are down 22% for the year, the market itself is up 9.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's worth noting that the last three months did the real damage, with a 35% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Ikena Oncology (of which 1 doesn't sit too well with us!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
