Shareholders in Eiger BioPharmaceuticals (NASDAQ:EIGR) are in the red if they invested three years ago
Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) shareholders will doubtless be very grateful to see the share price up 41% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 42% in the last three years, significantly under-performing the market.
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 Eiger BioPharmaceuticals
Eiger BioPharmaceuticals 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last three years, Eiger BioPharmaceuticals saw its revenue grow by 129% per year, compound. That is faster than most pre-profit companies. While its revenue increased, the share price dropped at a rate of 12% per year. That seems like an unlucky result for holders. It's possible that the prior share price assumed unrealistically high future growth. Before considering a purchase, investors should consider how quickly expenses are growing, relative to revenue.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Eiger BioPharmaceuticals' financial health with this free report on its balance sheet.
A Different Perspective
We regret to report that Eiger BioPharmaceuticals shareholders are down 26% for the year. Unfortunately, that's worse than the broader market decline of 8.5%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.9% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Eiger BioPharmaceuticals better, we need to consider many other factors. Take risks, for example - Eiger BioPharmaceuticals has 3 warning signs we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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.
