Examining Indoor Skydive Australia Group Limited’s (ASX:IDZ) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IDZ’s latest performance announced on 30 June 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Indoor Skydive Australia Group
Could IDZ beat the long-term trend and outperform its industry?
I like to 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 method enables me to assess many different companies on a more comparable basis, using the latest information. For Indoor Skydive Australia Group, its latest trailing-twelve-month earnings is -A$0.9M, which compared to the prior year’s level, has become less negative. Since these values are relatively short-term thinking, I’ve calculated an annualized five-year figure for Indoor Skydive Australia Group’s earnings, which stands at -A$1.7M. This suggests that, though net income is negative, it has become less negative over the years.
We can further evaluate Indoor Skydive Australia Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Indoor Skydive Australia Group’s top-line has grown by 49.46% on average, signalling that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the Australian hospitality industry has been relatively flat in terms of earnings growth in the past year, evening out from a robust 14.41% over the previous five years. This suggests that despite the fact that Indoor Skydive Australia Group is presently running a loss, whatever recent headwind the industry is enduring, Indoor Skydive Australia Group is less exposed compared to its peers.
What does this mean?
Though Indoor Skydive Australia Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues Indoor Skydive Australia Group may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Indoor Skydive Australia Group to get a better picture of the stock by looking at: