Understanding how Swick Mining Services Limited (ASX:SWK) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Swick Mining Services is doing by comparing its latest earnings with its long-term trend as well as the performance of its metals and mining industry peers. Check out our latest analysis for Swick Mining Services

Did SWK perform worse than its track record and industry?

For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine many different companies on a more comparable basis, using the most relevant data points. For Swick Mining Services, its most recent bottom-line (trailing twelve month) is -A$4.3M, which compared to the prior year’s level, has become more negative. Since these values are relatively short-term thinking, I have computed an annualized five-year figure for Swick Mining Services’s earnings, which stands at A$0.6M.

We can further evaluate Swick Mining Services’s loss by researching what’s going on in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over the last couple of years has been relatively subdued, remaining flat on average at -0.02%. Since top-line growth is also pretty flat, the key to profitability in the future would be controlling cost growth rates. Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 7.36% in the past year, and a substantial 11.48% over the past five. This means that any uplift the industry is benefiting from, Swick Mining Services has not been able to reap as much as its average peer.

What does this mean?

Though Swick Mining Services’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Swick Mining Services may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Swick Mining Services to get a better picture of the stock by looking at:

1. Financial Health: Is SWK’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.