Measuring Prescient Therapeutics Limited’s (ASX:PTX) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess PTX’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Prescient Therapeutics

Was PTX’s weak performance lately a part of a long-term decline?

For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 allows me to assess various companies on a more comparable basis, using the most relevant data points. For Prescient Therapeutics, its most recent twelve-month earnings is -A$2.6M, which compared to the previous year’s figure, has become more negative. Given that these values may be relatively short-term thinking, I’ve created an annualized five-year value for PTX’s earnings, which stands at -A$1.3M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.

Additionally, we can evaluate Prescient Therapeutics’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last few years has grown by 26.00%, implying that Prescient Therapeutics is in a high-growth period with expenses racing ahead high top-line growth rates, leading to yearly losses. Looking at growth from a sector-level, the Australian biotechnology industry has been growing, albeit, at a muted single-digit rate of 9.22% in the past twelve months, and a substantial 31.57% over the past five. This shows that whatever uplift the industry is benefiting from, Prescient Therapeutics has not been able to gain as much as its industry peers.

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 occur going forward, and when. The most insightful step is to assess company-specific issues Prescient Therapeutics may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Prescient Therapeutics to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for PTX’s future growth? Take a look at our free research report of analyst consensus for PTX’s outlook.

2. Financial Health: Is PTX’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.

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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.