Oncternal Therapeutics (NASDAQ:ONCT) investors are sitting on a loss of 75% if they invested a year ago
The art and science of stock market investing requires a tolerance for losing money on some of the shares you buy. But it's not unreasonable to try to avoid truly shocking capital losses. It must have been painful to be a Oncternal Therapeutics, Inc. (NASDAQ:ONCT) shareholder over the last year, since the stock price plummeted 75% in that time. That'd be enough to make even the strongest stomachs churn. Oncternal Therapeutics may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 43% in about a quarter. That's not much fun for holders.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for Oncternal Therapeutics
Because Oncternal Therapeutics 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Oncternal Therapeutics saw its revenue grow by 112%. That's a strong result which is better than most other loss making companies. So the hefty 75% share price crash makes us think the company has somehow offended market participants. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Oncternal Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
Given that the market gained 3.7% in the last year, Oncternal Therapeutics shareholders might be miffed that they lost 75%. 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. With the stock down 43% 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 Oncternal Therapeutics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Oncternal Therapeutics (of which 1 makes us a bit uncomfortable!) you should know about.
Oncternal 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.
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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.
