Assessing Obalon Therapeutics Inc’s (NASDAQ:OBLN) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess OBLN’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Obalon Therapeutics

How Well Did OBLN Perform?

I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to assess various companies on a more comparable basis, using the most relevant data points. For Obalon Therapeutics, its most recent trailing-twelve-month earnings is -US$34.76M, which, relative to the previous year’s level, has become more negative. Given that these figures are somewhat nearsighted, I have determined an annualized five-year figure for Obalon Therapeutics’s earnings, which stands at -US$21.52M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.

We can further analyze Obalon Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Obalon Therapeutics’s top-line has increased by 31.52% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 10.69% over the past twelve months, and a more muted 9.16% over the past five. This shows that any uplift the industry is deriving benefit from, Obalon Therapeutics has not been able to reap as much as its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Obalon Therapeutics may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Obalon Therapeutics to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for OBLN’s future growth? Take a look at our free research report of analyst consensus for OBLN’s outlook.

• 2. Financial Health: Is OBLN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

• 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.