It's easy to match the overall market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Adicet Bio, Inc. (NASDAQ:ACET) share price is down 17% in the last year. That's well below the market decline of 9.4%. Adicet Bio may have better days ahead, of course; we've only looked at a one year period. Unfortunately the last month hasn't been any better, with the share price down 38%.

If the past week is anything to go by, investor sentiment for Adicet Bio isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Adicet Bio

Adicet Bio wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Adicet Bio's revenue didn't grow at all in the last year. In fact, it fell 46%. That looks pretty grim, at a glance. The stock price has languished lately, falling 17% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Adicet Bio shareholders are down 17% for the year, even worse than the market loss of 9.4%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. Notably, the loss over the last year isn't as bad as the 30% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. 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. Take risks, for example - Adicet Bio has 4 warning signs (and 1 which can't be ignored) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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