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Assessing Harris Technology Group Limited’s (ASX:HT8) 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 HT8’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 Harris Technology Group
How HT8 fared against its long-term earnings performance and its industry
I look at 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 technique allows me to examine various companies on a similar basis, using the latest information. For Harris Technology Group, its most recent trailing-twelve-month earnings is -AU$1.01M, which, in comparison to last year’s level, has become less negative. Given that these figures may be somewhat nearsighted, I’ve created an annualized five-year value for HT8’s earnings, which stands at -AU$2.29M. This shows that, while net income is negative, it has become less negative over the years.
We can further evaluate Harris Technology Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Harris Technology Group’s top-line has increased by 10.45% on average, implying that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the Australian online retail industry has been growing its average earnings by double-digit 14.34% over the prior twelve months, and 25.39% over the previous five years. This means that, while Harris Technology Group is presently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
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 envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Harris Technology Group may be facing and whether management guidance has steadily been met in the past. You should continue to research Harris Technology Group to get a better picture of the stock by looking at:
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Financial Health: Is HT8’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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Valuation: What is HT8 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HT8 is currently mispriced by the market.
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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.