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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Galmed Pharmaceuticals Ltd’s (NASDAQ:GLMD) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for Galmed Pharmaceuticals
Could GLMD beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I 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 allows me to analyze many different companies in a uniform manner using the most relevant data points. For Galmed Pharmaceuticals, its most recent bottom-line (trailing twelve month) is -US$12.30M, which compared to the previous year’s level, has become less negative. Since these figures may be somewhat short-term, I’ve determined an annualized five-year figure for GLMD’s earnings, which stands at -US$12.52M. This suggests that, although net income is negative, it has become less negative over the years.
We can further analyze Galmed Pharmaceuticals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Galmed Pharmaceuticals’s top-line has grown by 98.73% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning 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 19.47% over the last five years. This means though Galmed Pharmaceuticals is presently unprofitable, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Galmed Pharmaceuticals’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 difficult to forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Galmed Pharmaceuticals may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Galmed Pharmaceuticals to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for GLMD’s future growth? Take a look at our free research report of analyst consensus for GLMD’s outlook.
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Financial Health: Is GLMD’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.
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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.