Yahoo Finance Loss-making Scilex Holding (NASDAQ:SCLX) sheds a further US$255m, taking total shareholder losses to 13% over 1 year
It's easy to feel disappointed if you buy a stock that goes down. But often it is not a reflection of the fundamental business performance. The Scilex Holding Company (NASDAQ:SCLX) share price is down 13% in the last year. But that actually beats the market decline of 21%. We wouldn't rush to judgement on Scilex Holding because we don't have a long term history to look at. The last month has also been disappointing, with the stock slipping a further 16%.
With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for Scilex Holding
Given that Scilex Holding 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Scilex Holding saw its revenue grow by 14%. That's definitely a respectable growth rate. Considering the limp overall market, the share price loss of 13% over the year isn't too bad. It's likely that the revenue growth encouraged some shareholders to hold firm. So we definitely think this is a good candidate for further research; share price down, revenue up.
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 Scilex Holding stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While they no doubt would have preferred make a profit, at least Scilex Holding shareholders didn't do too badly in the last year. Their loss of 13%, actually beat the broader market, which lost around 21%. Things weren't so bad until the last three months, when the stock dropped 16%. The recent drop implies that investors are increasingly averse to the stock -- quite possibly due to a deterioration of the business. However, this could create an opportunity if the fundamentals remain strong. 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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Scilex Holding , and understanding them should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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