Examining Oklo Resources Limited’s (ASX:OKU) 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 OKU’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. View our latest analysis for Oklo Resources

Did OKU perform worse than its track record and industry?

I prefer to use the ‘latest twelve-month’ data, 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 technique allows me to analyze many different companies in a uniform manner using the most relevant data points. For Oklo Resources, its most recent bottom-line (trailing twelve month) is -AU$1.84M, which compared to last year’s level, has become more negative. Since these figures are relatively short-term, I’ve created an annualized five-year value for OKU’s net income, which stands at -AU$932.30K. This doesn’t look much better, as earnings seem to have steadily been getting more and more negative over time.

We can further evaluate Oklo Resources’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Oklo Resources has seen its revenue fall by more than half, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the Australian oil and gas industry has been increasing growth, more than doubling average earnings in the past year, and a strong 12.36% over the past five. This means that whatever uplift the industry is enjoying, Oklo Resources has not been able to leverage it as much as its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues Oklo Resources may be facing and whether management guidance has regularly been met in the past. You should continue to research Oklo Resources to get a better picture of the stock by looking at:

• 1. Financial Health: Is OKU’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.

• 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 December 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.