The art and science of stock market investing requires a tolerance for losing money on some of the shares you buy. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. We wouldn't blame Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) shareholders if they were still in shock after the stock dropped like a lead balloon, down 77% in just one year. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 27% in three years. In the last ninety days we've seen the share price slide 80%. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Oramed Pharmaceuticals

Given that Oramed Pharmaceuticals didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In just one year Oramed Pharmaceuticals saw its revenue fall by 0.3%. That's not what investors generally want to see. The share price fall of 77% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.

You can see below how earnings and revenue have changed over time (discover 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. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Oramed Pharmaceuticals stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We regret to report that Oramed Pharmaceuticals shareholders are down 77% for the year. Unfortunately, that's worse than the broader market decline of 13%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Oramed Pharmaceuticals is showing 6 warning signs in our investment analysis , and 2 of those are significant...