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Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of ASIT Biotech S.A. (EBR:ASIT) have suffered share price declines over the last year. The share price is down a hefty 61% in that time. We wouldn't rush to judgement on ASIT Biotech because we don't have a long term history to look at. Unfortunately the share price momentum is still quite negative, with prices down 23% in thirty days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
View our latest analysis for ASIT Biotech
ASIT Biotech recorded just €568,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, they may be hoping that ASIT Biotech comes up with a great new treatment, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. It certainly is a dangerous place to invest, as ASIT Biotech investors might realise.
When it reported in December 2018 ASIT Biotech had minimal net cash consider its expenditure: just €8.9m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. That probably explains why the share price is down 61% in the last year. The image below shows how ASIT Biotech's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
ASIT Biotech shareholders are down 61% for the year, even worse than the market loss of 3.1%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 6.6%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). You could get a better understanding of ASIT Biotech's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.