Ryvu Therapeutics (WSE:RVU) shareholders lost 15% as shares fell 15% last week
In order to justify the effort of picking individual stocks, it is worth striving to beat the returns of an index fund. But in any portfolio, results will be mixed between individual stocks. So we wouldn’t blame in the long run Ryvu Therapeutics SA (WSE:RVU) shareholders for doubting their decision to hold as the stock has fallen 44% in half a decade. And some of the more recent buyers are likely also worried, with the stock having fallen 31% in the past year. Shareholders have had an even tougher race lately, with the share price falling 37% in the past 90 days. But it could be linked to the weakness of the market, which fell 17% over the same period.
With the stock down 15% in the past week, it’s worth taking a look at the trade performance and seeing if there are any red flags.
Check out our latest analysis for Ryvu Therapeutics
Ryvu Therapeutics is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. Shareholders of unprofitable companies generally expect strong revenue growth. Some companies are willing to defer profitability to increase revenue faster, but in this case, good revenue growth is expected.
Over the past five years, Ryvu Therapeutics has seen its revenue decline by 27% per year. That puts him in an unattractive cohort, to say the least. At first glance, we posit that the 8% compound stock price drop over five years is well justified by fundamental deterioration. We doubt many shareholders will be thrilled with this share price performance. It’s possible for companies to bounce back, but as Buffett puts it, “turnarounds rarely turn around.”
The graph below illustrates the evolution of income and revenue over time (reveal the exact values by clicking on the image).
This free Ryvu Therapeutics’ Interactive Balance Sheet Strength Report is a great place to start if you want to dive deeper into the stock.
What about the Total Shareholder Return (TSR)?
Investors should note that there is a difference between Ryvu Therapeutics’ total shareholder return (TSR) and the change in its stock price, which we’ve covered above. The TSR attempts to capture the value of the dividends (as if they were reinvested) as well as any benefits or discounted capital increases offered to shareholders. Ryvu Therapeutics hasn’t paid dividends, but its -15% TSR exceeds its stock price return of -44%, implying it either started a business or raised capital at a discount; thereby providing added value to shareholders.
A different perspective
We regret to report that Ryvu Therapeutics shareholders are down 31% for the year. Unfortunately, this is worse than the general market decline of 12%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance may point to unresolved challenges, given that it was worse than the 3% annualized loss over the past half-decade. We realize that Baron Rothschild said investors should “buy when there’s blood in the streets”, but we caution that investors must first make sure they are buying a high quality company. It is always interesting to follow the evolution of the share price over the long term. But to better understand Ryvu Therapeutics, we need to consider many other factors. Even so, know that Ryvu Therapeutics shows 2 warning signs in our investment analysis you should know…
If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on PL exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.