Do you own NVCR stocks? Here’s why you shouldn’t sell just yet
Novocure Ltd (NASDAQ: NVCR) had a rough five days as the stock was at a -2.72% average. Yet investors shouldn’t sell right now: analysts are torn between recommending the stock as a Strong Buy, or as a Hold, but none are saying it’s a Strong Sell just yet.
Here’s what you have to know about Novocure Ltd.
Understanding the market
Novocure was founded in 2000 by Yoram Palti, a professor emeritus of biophysics and physiology. The company has a patient-forward approach that aspires to extend survival among the most aggressive forms of cancer today by treating solid tumor cancers, all the while sparing healthy tissue and avoiding the harsh side effects of most cancer treatments. It currently employs over 1000 people and uses wearable devices to treat tumors.
While Novocure’s stocks experienced remarkable highs over the past five years, its previous annual year has been tumultuous, to say the least. The firm reported a full-year revenue of $535 million, while incurring a net loss of $26 million. Meanwhile, the firm has allocated $56.9 million towards research, development, and clinical studies.
The potent combination of declining revenues, compressing margins, and higher spending could spell out disaster for investors. But here’s why NVCR is not yet a lost cause.
A sinking ship or a treasure trove?
Analysts say that NVCR has delivered an enviable compound annual growth rate (CAGR) of 52% over the last five years. The price of NVCR is currently at 723% of what it was five years ago, which means the stock is poised to continue growing over the years.
On the other hand, other experts attribute NVCR’s growth to its work in Tumor Treating Fields therapy. This, and its revolutionary pipeline nearing the final stages of several studies, are among the things that make NVCR attractive.
Novocure’s pipeline includes the studies for treating gastric cancer, brain metastases, ovarian cancer, pancreatic cancer, and lung cancer. All these are worthy investments that would pay off if the company becomes successful.
Yet it is always a gamble on where you will put your money on. At the end of the day, the investor has to be smart in deciding which stocks are worthy investments and which ones are too risky.
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