Sage Therapeutics (NASDAQ:SAGE) Share Prices Have Dropped 65% In The Last Year
It is a pleasure to report that the Sage Therapeutics, Inc. (NASDAQ:SAGE) is up 50% in the last quarter. But that isn't much consolation to those who have suffered through the declines of the last year. Like a receding glacier in a warming world, the share price has melted 65% in that period. The share price recovery is not so impressive when you consider the fall. Arguably, the fall was overdone.
See our latest analysis for Sage Therapeutics
Sage Therapeutics wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 Sage Therapeutics saw its revenue grow by 440%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 65%. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
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 like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Sage Therapeutics will earn in the future (free profit forecasts).
A Different Perspective
While the broader market gained around 15% in the last year, Sage Therapeutics shareholders lost 65%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 1.9%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth 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. Even so, be aware that Sage Therapeutics is showing 2 warning signs in our investment analysis , you should know about...
Sage Therapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.
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