Long term investing works well, but it doesn’t always work for each individual stock. We don’t wish catastrophic capital loss on anyone. Imagine if you held 10x Genomics, Inc. (NASDAQ:TXG) for half a decade as the share price tanked 90%. And we doubt long term believers are the only worried holders, since the stock price has declined 67% over the last twelve months. Furthermore, it’s down 43% in about a quarter. That’s not much fun for holders. 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.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they’ve been consistent with returns.

Trump has pledged to “unleash” American oil and gas and these 15 US stocks have developments that are poised to benefit.

10x Genomics wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally hope 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.

Over five years, 10x Genomics grew its revenue at 18% per year. That’s well above most other pre-profit companies. So it’s not at all clear to us why the share price sunk 14% throughout that time. You’d have to assume the market is worried that profits won’t come soon enough. While there might be an opportunity here, you’d want to take a close look at the balance sheet strength.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So we recommend checking out this free report showing consensus forecasts

While the broader market gained around 9.3% in the last year, 10x Genomics shareholders lost 67%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 14% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with 10x Genomics , and understanding them should be part of your investment process.