The Oculis Holding AG (NASDAQ:OCS) share price has had a bad week, falling 16%. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 10%.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
Check out our latest analysis for Oculis Holding
Oculis Holding recorded just CHF912,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that Oculis Holding will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets to raise equity. 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.
Our data indicates that Oculis Holding had CHF115m more in total liabilities than it had cash, when it last reported in December 2022. That makes it extremely high risk, in our view. So the fact that the stock is up 159% in the last year shows that high risks can lead to high rewards, sometimes. It's clear more than a few people believe in the potential. You can click on the image below to see (in greater detail) how Oculis Holding's cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.
A Different Perspective
It's nice to see that Oculis Holding shareholders have gained 10% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 6.2% in that time. This suggests the company is continuing to win over new investors. 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. Like risks, for instance. Every company has them, and we've spotted 7 warning signs for Oculis Holding (of which 4 don't sit too well with us!) you should know about.