In this article, I will take a look at Pluristem Therapeutics Inc’s (NASDAQ:PSTI) most recent earnings update (31 March 2018) and compare these latest figures against its performance over the past few years, along with how the rest of PSTI’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Pluristem Therapeutics
Could PSTI beat the long-term trend and outperform its industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to analyze different companies on a more comparable basis, using new information. For Pluristem Therapeutics, its latest trailing-twelve-month earnings is -US$24.16M, which, in comparison to the previous year’s level, has become less negative. Given that these figures are relatively short-term thinking, I’ve computed an annualized five-year value for PSTI’s net income, which stands at -US$22.31M. This means that, Pluristem Therapeutics has historically performed better than recently, even though it seems like earnings are now heading back towards to right direction again.
We can further examine Pluristem Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Pluristem Therapeutics’s top-line has grown by 12.28% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Inspecting growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% in the previous year, and 17.77% over the past half a decade. This means any uplift the industry is deriving benefit from, Pluristem Therapeutics has not been able to reap as much as its industry peers.
What does this mean?
Though Pluristem Therapeutics’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 valuable step is to examine company-specific issues Pluristem Therapeutics may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Pluristem Therapeutics to get a more holistic view of the stock by looking at: