The Institute of Oncology, Inc. (NASDAQ:TOI) shareholders should be happy to see the stock price rise 29% in the last quarter. But that doesn’t change the reality of the past twelve months’ underperformance. After all, the stock price is down 12% in the past year, significantly underperforming the market.
Although last week was more reassuring for shareholders, they are still in the red over the past year, so let’s see if the underlying activity was responsible for the decline.
See our latest analysis for the Institute of Oncology
Given that the Institute of Oncology has posted losses over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. When a business is not making a profit, you generally expect to see good revenue growth. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.
Over the past year, the Institute of Oncology has seen its income increase by 8.3%. While that might sound decent, it’s not great considering the company continues to make losses. Given this fairly weak revenue growth (and lack of earnings), it’s not particularly surprising to see the stock drop 12% in one year. It is important to remember that non-profit businesses need to grow. So remember, if you’re buying a not-for-profit business, you risk being a not-for-profit investor.
The graph below illustrates the evolution of income and income over time (reveal the exact values by clicking on the image).
Balance sheet strength is critical. It might be interesting to take a look at our free report on the evolution of its financial situation over time.
A different perspective
Oncology Institute shareholders are down 12% for the year, worse than the market’s 8.4% loss. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. Putting aside the past twelve months, it’s good to see that the stock price has rebounded 29% in the past ninety days. It could just be a bounce because the selloff was too aggressive, but fingers crossed it’s the start of a new trend. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Like risks, for example. Every business has them, and we’ve spotted 2 warning signs for the Institute of Oncology (1 of which can’t be ignored!) that you should know about.
We’ll like the Institute of Oncology better if we see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.