In This Article:
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Timeless Software Limited (SEHK:8028) useful as an attempt to give more color around how Timeless Software is currently performing. See our latest analysis for Timeless Software
Could 8028 beat the long-term trend and outperform its industry?
I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to examine different companies on a similar basis, using the most relevant data points. For Timeless Software, its most recent bottom-line (trailing twelve month) is -HK$7.03M, which compared to last year’s level, has become less negative. Since these figures may be relatively myopic, I have computed an annualized five-year figure for Timeless Software’s net income, which stands at -HK$25.29M. This means though net income is negative, it has become less negative over the years.
We can further examine Timeless Software’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Timeless Software’s top-line has increased by a mere 6.56%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the HK metals and mining industry has been growing average earnings growth of 77.14% in the previous year, . This is a a solid turnaround from a volatile drop of -6.64% in the past few years. This shows that whatever tailwind the industry is benefiting from, Timeless Software has not been able to realize the gains unlike its average peer.
What does this mean?
Timeless Software’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues Timeless Software may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Timeless Software to get a better picture of the stock by looking at:
-
1. Financial Health: Is 8028’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.