Pacira BioSciences (NASDAQ:PCRX) shareholders have lost 49% over 1 year, earnings decline likely the culprit

The simplest way to benefit from a rising market is to buy 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 Pacira BioSciences, Inc. (NASDAQ:PCRX) share price is down 49% in the last year. That's disappointing when you consider the market declined 13%. Longer term investors have fared much better, since the share price is up 19% in three years. The last week also saw the share price slip down another 6.9%.

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

View our latest analysis for Pacira BioSciences

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Unhappily, Pacira BioSciences had to report a 63% decline in EPS over the last year. This fall in the EPS is significantly worse than the 49% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. With a P/E ratio of 111.49, it's fair to say the market sees an EPS rebound on the cards.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Pacira BioSciences' key metrics by checking this interactive graph of Pacira BioSciences's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Pacira BioSciences shareholders are down 49% 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. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For example, we've discovered 4 warning signs for Pacira BioSciences (1 is concerning!) that you should be aware of before investing here.

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 American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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