Shareholders in CytomX Therapeutics (NASDAQ:CTMX) are in the red if they invested five years ago
Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Spare a thought for those who held CytomX Therapeutics, Inc. (NASDAQ:CTMX) for five whole years - as the share price tanked 89%. And it's not just long term holders hurting, because the stock is down 81% in the last year. The falls have accelerated recently, with the share price down 62% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for CytomX Therapeutics
Because CytomX 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. 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.
In the last half decade, CytomX Therapeutics saw its revenue increase by 8.2% per year. That's a fairly respectable growth rate. So the stock price fall of 14% per year seems pretty steep. The market can be a harsh master when your company is losing money and revenue growth disappoints.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling CytomX Therapeutics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 8.5% in the twelve months, CytomX Therapeutics shareholders did even worse, losing 81%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 14% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand CytomX Therapeutics better, we need to consider many other factors. Take risks, for example - CytomX Therapeutics has 3 warning signs (and 1 which can't be ignored) we think you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
