Advertisement
U.S. markets open in 1 hour 55 minutes
  • S&P Futures

    5,306.75
    -1.50 (-0.03%)
     
  • Dow Futures

    40,142.00
    -2.00 (-0.00%)
     
  • Nasdaq Futures

    18,498.25
    -5.50 (-0.03%)
     
  • Russell 2000 Futures

    2,139.70
    +1.30 (+0.06%)
     
  • Crude Oil

    82.47
    +1.12 (+1.38%)
     
  • Gold

    2,232.10
    +19.40 (+0.88%)
     
  • Silver

    24.73
    -0.02 (-0.09%)
     
  • EUR/USD

    1.0796
    -0.0034 (-0.31%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.00
    +0.22 (+1.72%)
     
  • dólar/libra

    1.2622
    -0.0016 (-0.12%)
     
  • USD/JPY

    151.3800
    +0.1340 (+0.09%)
     
  • Bitcoin USD

    70,723.54
    +650.37 (+0.93%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,955.20
    +23.22 (+0.29%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Shareholders in Inovio Pharmaceuticals (NASDAQ:INO) are in the red if they invested a year ago

It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. We wouldn't blame Inovio Pharmaceuticals, Inc. (NASDAQ:INO) shareholders if they were still in shock after the stock dropped like a lead balloon, down 75% in just one year. That'd be a striking reminder about the importance of diversification. However, the longer term returns haven't been so bad, with the stock down 28% in the last three years. The falls have accelerated recently, with the share price down 26% in the last three months.

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 Inovio Pharmaceuticals

Inovio Pharmaceuticals recorded just US$1,602,712 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, they may be hoping that Inovio Pharmaceuticals comes up with a great new product, before it runs out of money.

We think companies that have neither significant revenues nor profits are pretty high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Inovio Pharmaceuticals has already given some investors a taste of the bitter losses that high risk investing can cause.

Inovio Pharmaceuticals had cash in excess of all liabilities of US$270m when it last reported (March 2022). That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. We'd venture that shareholders are concerned about the need for more capital, because the share price has dropped 75% in the last year. You can see in the image below, how Inovio Pharmaceuticals' cash levels have changed over time (click to see the values).

debt-equity-history-analysis
debt-equity-history-analysis

Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? I'd like that just about as much as I like to drink milk and fruit juice mixed together. You can click here to see if there are insiders selling.

A Different Perspective

While the broader market lost about 15% in the twelve months, Inovio Pharmaceuticals shareholders did even worse, losing 75%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. 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 Inovio Pharmaceuticals better, we need to consider many other factors. Even so, be aware that Inovio Pharmaceuticals is showing 4 warning signs in our investment analysis , you should know about...

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.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Advertisement