Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Allogene Therapeutics, Inc. (NASDAQ:ALLO) share price slid 44% over twelve months. That's well below the market return of 39%. Because Allogene Therapeutics hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 30% in the last three months.
Because Allogene 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).NasdaqGS:ALLO Earnings and Revenue Growth June 5th 2021
Allogene Therapeutics is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Allogene Therapeutics in this interactive graph of future profit estimates.
A Different Perspective
Given that the market gained 39% in the last year, Allogene Therapeutics shareholders might be miffed that they lost 44%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 30% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Allogene Therapeutics better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Allogene Therapeutics you should be aware of.
We will like Allogene Therapeutics 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.
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. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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