Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of Karyopharm Therapeutics Inc. (NASDAQ:KPTI) have suffered share price declines over the last year. The share price has slid 61% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 34% lower than three years ago). The falls have accelerated recently, with the share price down 36% in the last three months.
Karyopharm Therapeutics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Karyopharm Therapeutics grew its revenue by 163% over the last year. That's well above most other pre-profit companies. Meanwhile, the share price slid 61%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Karyopharm Therapeutics
A Different Perspective
Investors in Karyopharm Therapeutics had a tough year, with a total loss of 61%, against a market gain of about 59%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 0.3% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Karyopharm Therapeutics better, we need to consider many other factors. Even so, be aware that Karyopharm Therapeutics is showing 3 warning signs in our investment analysis , you should know about...
Karyopharm Therapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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