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Assessing Genscript Biotech Corporation’s (SEHK:1548) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 1548’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for Genscript Biotech
Was 1548’s recent earnings decline indicative of a tough track record?
I look at 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 technique enables me to analyze different stocks in a uniform manner using the most relevant data points. For Genscript Biotech, its most recent trailing-twelve-month earnings is US$26.12M, which, relative to last year’s level, has declined by -0.18%. Since these figures are somewhat myopic, I have estimated an annualized five-year figure for Genscript Biotech’s net income, which stands at US$18.17M This shows that, on average, Genscript Biotech has been able to improve its earnings over the last few years.
What’s enabled this growth? Let’s take a look at whether it is solely a result of an industry uplift, or if Genscript Biotech has seen some company-specific growth. In the last few years, Genscript Biotech grew its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the HK life sciences industry has been growing its average earnings by double-digit 20.76% over the past year, and 17.01% over the last five years. This means that any tailwind the industry is profiting from, Genscript Biotech has not been able to leverage it as much as its average peer.
What does this mean?
Though Genscript Biotech’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Genscript Biotech to get a better picture of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for 1548’s future growth? Take a look at our free research report of analyst consensus for 1548’s outlook.
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2. Financial Health: Is 1548’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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3. 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.