IRRAS AB (publ) (STO:IRRAS) shareholders should be happy to see the share price up 14% in the last quarter. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 39% in one year, under-performing the market.
View our latest analysis for IRRAS
IRRAS recorded just kr1,094,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that IRRAS can make progress and gain better traction for the business, before it runs low on cash.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing.
When it reported in June 2019 IRRAS had minimal cash in excess of all liabilities consider its expenditure: just kr92m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. That probably explains why the share price is down 39% in the last year . You can see in the image below, how IRRAS's cash levels have changed over time (click to see the values). You can see in the image below, how IRRAS's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
While IRRAS shareholders are down 39% for the year, the market itself is up 3.8%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 14% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. Before spending more time on IRRAS it might be wise to click here to see if insiders have been buying or selling shares.