Assessing Draganfly Investments Limited’s (AIM:DRG) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess DRG’s latest performance announced on 31 October 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for Draganfly Investments
How Well Did DRG Perform?
To account for any quarterly or half-yearly updates, I 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 blend enables me to analyze various companies on a more comparable basis, using the latest information. For Draganfly Investments, its most recent twelve-month earnings is -£0.4M, which, in comparison to the prior year’s figure, has become more negative. Since these values are relatively nearsighted, I’ve calculated an annualized five-year value for DRG’s net income, which stands at -£0.2M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
Additionally, we can evaluate Draganfly Investments’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the last couple of years has increased by a mere 6.90%. Since top-line growth is also pretty stale the key to profitability going forward would be controlling costs. Viewing growth from a sector-level, the UK capital markets industry has been growing its average earnings by double-digit 22.59% over the previous year, and 14.00% over the previous five years. This shows that any tailwind the industry is profiting from, Draganfly Investments has not been able to reap as much as its industry peers.
What does this mean?
Though Draganfly Investments’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Draganfly Investments may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Draganfly Investments to get a more holistic view of the stock by looking at:
1. Financial Health: Is DRG’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.