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Reflecting on Alector's (NASDAQ:ALEC) Share Price Returns Over The Last Year

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Simply Wall St
·3 min read
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It is doubtless a positive to see that the Alector, Inc. (NASDAQ:ALEC) share price has gained some 37% in the last three months. But in truth the last year hasn't been good for the share price. In fact, the price has declined 34% in a year, falling short of the returns you could get by investing in an index fund.

Check out our latest analysis for Alector

Because Alector 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Alector saw its revenue fall by 0.7%. That's not what investors generally want to see. Shareholders have seen the share price drop 34% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

If you are thinking of buying or selling Alector stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Given that the market gained 39% in the last year, Alector shareholders might be miffed that they lost 34%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 37%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. Take risks, for example - Alector has 2 warning signs we think you should be aware of.

Of course Alector 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 US exchanges.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.