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PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS) shareholders are doubtless heartened to see the share price bounce 87% in just one week. But that is meagre solace in the face of the shocking decline over three years. The share price has sunk like a leaky ship, down 89% in that time. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
The recent uptick of 87% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
PhaseBio Pharmaceuticals 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over three years, PhaseBio Pharmaceuticals grew revenue at 81% per year. That is faster than most pre-profit companies. So why has the share priced crashed 24% per year, in the same time? You'd want to take a close look at the balance sheet, as well as the losses. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling PhaseBio Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
PhaseBio Pharmaceuticals shareholders are down 68% for the year, falling short of the market return. The market shed around 16%, no doubt weighing on the stock price. The three-year loss of 24% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. To that end, you should learn about the 5 warning signs we've spotted with PhaseBio Pharmaceuticals (including 2 which are potentially serious) .
We will like PhaseBio Pharmaceuticals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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.
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