While Innoviva, Inc. (NASDAQ: INVA) Shareholders are probably generally satisfied, the stock hasn’t gone particularly well in recent times, with the stock price falling 20% in the last quarter. On the positive side, the share price has risen over the past half-decade. Unfortunately, its 20% yield is lower than the market yield of 74%.
To quote Buffett, “Ships will sail around the world but the Flat Earth Society will thrive. There will continue to be wide spreads between price and value in the market … with the course of action.
Over the past five years, Innoviva has become profitable. This is generally seen as a real positive, so we would expect the share price to rise. Since the company made a profit three years ago, but not five years ago, it is also worth looking at the stock price returns over the past three years. In fact, the Innoviva share price has fallen 13% over the past three years. Over the same period, EPS is up 31% per year. It seems that there is a real lag between the increase in EPS and the share price, which has fallen by -5% per year for three years.
The image below shows how EPS has tracked over time (if you click on the image you can see more detail).
It is of course great to see how Innoviva has increased its profits over the years, but the future is more important to shareholders. If you are thinking of buying or selling Innoviva shares, you should check this out FREE detailed report on its balance sheet.
A different perspective
Investors in Innoviva had a difficult year, with a total loss of 11%, against a market gain of around 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the plus side, long-term shareholders made money, gaining 4% per year over half a decade. The recent sell-off may be an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. It is always interesting to follow the evolution of stock prices over the long term. But to understand Innoviva better, there are many other factors to consider. Consider risks, for example. Every business has them, and we’ve spotted 3 warning signs for Innoviva you should know.
We will like Innoviva 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 market-weighted average returns of stocks currently traded on US stock exchanges.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.