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As every investor would know, you don't hit a homerun every time you swing. But serious investors should think long and hard about avoiding extreme losses. So spare a thought for the long term shareholders of Adaptimmune Therapeutics plc (NASDAQ:ADAP); the share price is down a whopping 72% in the last twelve months. That'd be a striking reminder about the importance of diversification. We note that it has not been easy for shareholders over three years, either; the share price is down 64% in that time. On top of that, the share price has dropped a further 24% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
Because Adaptimmune Therapeutics is loss-making, 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Adaptimmune Therapeutics saw its revenue grow by 19%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 72% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Adaptimmune Therapeutics's financial health with this free report on its balance sheet.
A Different Perspective
The last twelve months weren't great for Adaptimmune Therapeutics shares, which cost holders 72%, while the market was up about 4.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 29% 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. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.