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This week we saw the Personalis, Inc. (NASDAQ:PSNL) share price climb by 14%. But that is meagre solace when you consider how the price has plummeted over the last year. To wit, the stock has dropped 82% over the last year. So it's not that amazing to see a bit of a bounce. The bigger issue is whether the company can sustain the momentum in the long term. 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 last year has been tough for Personalis shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
See our latest analysis for Personalis
Personalis 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Personalis' revenue didn't grow at all in the last year. In fact, it fell 19%. That's not what investors generally want to see. The market obviously agrees, since the share price tanked 82%. Holders should not lose the lesson: loss making companies should grow revenue. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Personalis stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
The last twelve months weren't great for Personalis shares, which performed worse than the market, costing holders 82%. Meanwhile, the broader market slid about 20%, likely weighing on the stock. The three-year loss of 22% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Personalis better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Personalis you should be aware of.