The past year for Caribou Biosciences (NASDAQ:CRBU) investors has not been profitable
Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in Caribou Biosciences, Inc. (NASDAQ:CRBU) have tasted that bitter downside in the last year, as the share price dropped 10%. That contrasts poorly with the market return of 20%. Caribou Biosciences hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. In contrast, the stock price has popped 8.9% in the last thirty days. But this could be related to good market conditions, with stocks up around 6.8% during the period.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
View our latest analysis for Caribou Biosciences
Given that Caribou Biosciences didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
Caribou Biosciences grew its revenue by 38% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 10% over twelve months, which is disappointing given the progress made. You might even wonder if the share price was previously over-hyped. But if revenue keeps growing, then at a certain point the share price would likely follow.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Caribou Biosciences in this interactive graph of future profit estimates.
A Different Perspective
While Caribou Biosciences shareholders are down 10% for the year, the market itself is up 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 6.7% 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. 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. For example, we've discovered 3 warning signs for Caribou Biosciences (1 can't be ignored!) that you should be aware of before investing here.
Of course Caribou Biosciences may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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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