Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. For example, after five long years the EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) share price is a whole 54% lower. That is extremely sub-optimal, to say the least. The last week also saw the share price slip down another 12%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Because EyePoint Pharmaceuticals made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over five years, EyePoint Pharmaceuticals grew its revenue at 18% per year. That's better than most loss-making companies. Unfortunately for shareholders the share price has dropped 9% per year - disappointing considering the growth. It's safe to say investor expectations are more grounded now. If you think the company can keep up its revenue growth, you'd have to consider the possibility that there's an opportunity here.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think EyePoint Pharmaceuticals will earn in the future (free profit forecasts).

A Different Perspective

EyePoint Pharmaceuticals shareholders are up 0.9% for the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 9% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand EyePoint Pharmaceuticals better, we need to consider many other factors. For example, we've discovered 3 warning signs for EyePoint Pharmaceuticals (1 is a bit concerning!) that you should be aware of before investing here.

EyePoint Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.