July 15, 2024

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Investors Who Bought Bavarian Nordic (CPH:BAVA) Shares Five Years Ago Are Now Down 69%

Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. For example the Bavarian Nordic A/S (CPH:BAVA) share price dropped 69% over five years. That is extremely sub-optimal, to say the least. Even worse, it’s down 51% in about a month, which isn’t fun at all.

View our latest analysis for Bavarian Nordic

Given that Bavarian Nordic 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over half a decade Bavarian Nordic reduced its trailing twelve month revenue by 13% for each year. That puts it in an unattractive cohort, to put it mildly. It seems appropriate, then, that the share price slid about 21% annually during that time. We don’t generally like to own companies that lose money and don’t grow revenues. You might be better off spending your money on a leisure activity. You’d want to research this company pretty thoroughly before buying, it looks a bit too risky for us.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

CPSE:BAVA Income Statement March 31st 2020

If you are thinking of buying or selling Bavarian Nordic stock, you should check out this FREE detailed report on its balance sheet.

What about the Total Shareholder Return (TSR)?

We’ve already covered Bavarian Nordic’s share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Bavarian Nordic’s TSR, at -67% is higher than its share price return of -69%. When you consider it hasn’t been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

While the broader market gained around 4.8% in the last year, Bavarian Nordic shareholders lost 15%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 20% doled out over the last five years. We’d need to see some sustained improvements in the key metrics before we could muster much enthusiasm. 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. For example, we’ve discovered 2 warning signs for Bavarian Nordic that you should be aware of before investing here.

We will like Bavarian Nordic better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DK exchanges.

If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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