Assessing Spark Energy Inc’s (NASDAQ:SPKE) 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 SPKE’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. View our latest analysis for Spark Energy
Commentary On SPKE’s Past Performance
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 technique enables me to assess different companies on a more comparable basis, using new information. For Spark Energy, the latest earnings is $11.3M, which, against last year’s figure, has escalated by a non-trivial 69.77%. Since these values are relatively myopic, I’ve computed an annualized five-year value for Spark Energy’s net income, which stands at $11.3M. This means on average, Spark Energy has been able to gradually grow its earnings over the last few years as well.
What’s enabled this growth? Well, let’s take a look at if it is only because of an industry uplift, or if Spark Energy has seen some company-specific growth. Over the last few years, Spark Energy top-line expansion has outstripped earnings and the growth rate of expenses. Though this brought about a margin contraction, it has cushioned Spark Energy’s earnings contraction. Eyeballing growth from a sector-level, the US electric utilities industry has been growing, albeit, at a unexciting single-digit rate of 5.63% over the previous year, and 3.58% over the past five years. This means any tailwind the industry is benefiting from, Spark Energy is able to leverage this to its advantage.
What does this mean?
Though Spark Energy’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Spark Energy to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SPKE’s future growth? Take a look at our free research report of analyst consensus for SPKE’s outlook.
2. Financial Health: Is SPKE’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.