When Anatara Lifesciences Ltd (ASX:ANR) released its most recent earnings update (30 June 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Anatara Lifesciences has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see ANR has performed. View our latest analysis for Anatara Lifesciences
Commentary On ANR’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to analyze different stocks on a more comparable basis, using new information. For Anatara Lifesciences, its latest earnings (trailing twelve month) is -A$1.7M, which, against the prior year’s level, has become more negative. Since these figures may be somewhat short-term thinking, I have determined an annualized five-year figure for ANR’s net income, which stands at -A$1.0M. This doesn’t seem to paint a better picture, since earnings seem to have consistently been getting more and more negative over time.
We can further examine Anatara Lifesciences’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last few years has risen by 68.75%, indicating that Anatara Lifesciences is in a high-growth phase with expenses racing ahead high top-line growth rates, leading to yearly losses. Scanning growth from a sector-level, the Australian biotechnology industry has been growing, albeit, at a subdued single-digit rate of 9.22% in the past twelve months, and a substantial 31.57% over the past five. This means any tailwind the industry is deriving benefit from, Anatara Lifesciences has not been able to leverage it as much as its industry peers.
What does this mean?
Though Anatara Lifesciences’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues Anatara Lifesciences may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Anatara Lifesciences to get a more holistic view of the stock by looking at: