In this commentary, I will examine Miragen Therapeutics Inc’s (NASDAQ:MGEN) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the biotechs industry performed. As an investor, I find it beneficial to assess MGEN’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Miragen Therapeutics
Was MGEN weak performance lately part of a long-term decline?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine many different companies on a similar basis, using the most relevant data points. For Miragen Therapeutics, its latest earnings (trailing twelve month) is -US$26.52M, which, against last year’s figure, has become more negative. Given that these values are somewhat myopic, I’ve computed an annualized five-year value for Miragen Therapeutics’s earnings, which stands at -US$19.17M. This doesn’t look much better, since earnings seem to have gradually been getting more and more negative over time.
We can further analyze Miragen Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Miragen Therapeutics has seen an annual decline in revenue of -33.89%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% in the previous twelve months, and 18.76% over the last five years. This means that whatever uplift the industry is benefiting from, Miragen Therapeutics has not been able to reap as much as its average peer.
What does this mean?
Miragen Therapeutics’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 happen in the future and when. The most valuable step is to assess company-specific issues Miragen Therapeutics may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Miragen Therapeutics to get a better picture of the stock by looking at: