Examining how Allahabad Bank (NSEI:ALBK) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Allahabad Bank is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its banks industry peers. View our latest analysis for Allahabad Bank
How ALBK fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to analyze many different companies on a more comparable basis, using the latest information. For Allahabad Bank, its latest trailing-twelve-month earnings is -IN₨2.79B, which, in comparison to the prior year’s figure, has become less negative. Since these values may be somewhat myopic, I have estimated an annualized five-year value for Allahabad Bank’s net income, which stands at IN₨7.64B.
We can further analyze Allahabad Bank’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Allahabad Bank has seen an annual decline in revenue of -2.16%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the IN banks industry has been growing its average earnings by double-digit 10.02% over the previous year, and a flatter 0.55% over the past five. This shows that, though Allahabad Bank is presently running a loss, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
Allahabad Bank’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Allahabad Bank may be facing and whether management guidance has dependably been met in the past. You should continue to research Allahabad Bank to get a better picture of the stock by looking at:
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1. Financial Health: Is ALBK’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.
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2. 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 March 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.