It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) shareholders over the last year, as the share price declined 23%. That's disappointing when you consider the market returned 61%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 9.2% in three years. It's down 34% in about a quarter.
Given that Ionis Pharmaceuticals didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
Ionis Pharmaceuticals' revenue didn't grow at all in the last year. In fact, it fell 35%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 23% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Ionis Pharmaceuticals is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Investors in Ionis Pharmaceuticals had a tough year, with a total loss of 23%, against a market gain of about 61%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.4% 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 Ionis Pharmaceuticals better, we need to consider many other factors. Even so, be aware that Ionis Pharmaceuticals is showing 2 warning signs in our investment analysis , and 1 of those is significant...
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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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