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It's nice to see the Aclaris Therapeutics, Inc. (NASDAQ:ACRS) share price up 11% in a week. But that doesn't change the fact that the returns over the last three years have been stomach churning. In that time the share price has melted like a snowball in the desert, down 90%. Arguably, the recent bounce is to be expected after such a bad drop. The thing to think about is whether the business has really turned around. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
While the stock has risen 11% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
We've discovered 3 warning signs about Aclaris Therapeutics. View them for free.
Given that Aclaris Therapeutics 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. 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.
Over three years, Aclaris Therapeutics grew revenue at 28% per year. That's well above most other pre-profit companies. So why has the share priced crashed 24% per year, in the same time? The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. Unless the balance sheet is strong, the company might have to raise capital.
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. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Aclaris Therapeutics
A Different Perspective
Aclaris Therapeutics provided a TSR of 6.7% over the last twelve months. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 0.9% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Aclaris Therapeutics better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Aclaris Therapeutics you should be aware of, and 2 of them don't sit too well with us.