Reflecting on Akebia Therapeutics' (NASDAQ:AKBA) Share Price Returns Over The Last Year
Akebia Therapeutics, Inc. (NASDAQ:AKBA) shareholders should be happy to see the share price up 10% in the last month. But that hardly compensates for the shocking decline over the last twelve months. During that time the share price has plummeted like a stone, down 71%. Arguably, the recent bounce is to be expected after such a bad drop. The important thing is whether the company can turn it around, longer term.
See our latest analysis for Akebia Therapeutics
Akebia 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Akebia Therapeutics' revenue didn't grow at all in the last year. In fact, it fell 26%. That looks pretty grim, at a glance. The market obviously agrees, since the share price tanked 71%. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Akebia Therapeutics shareholders are down 71% for the year, but the market itself is up 38%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Akebia Therapeutics you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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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