For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Visioneering Technologies Inc (ASX:VTI) useful as an attempt to give more color around how Visioneering Technologies is currently performing. View our latest analysis for Visioneering Technologies
How Well Did VTI Perform?
For the most up-to-date info, I use 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 different stocks in a uniform manner using the latest information. For Visioneering Technologies, its most recent trailing-twelve-month earnings is -US$16.98M, which compared to the prior year’s figure, has become more negative. Given that these figures are somewhat short-term thinking, I have estimated an annualized five-year figure for Visioneering Technologies’s net income, which stands at -US$14.54M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.
We can further assess Visioneering Technologies’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Visioneering Technologies’s top-line more than doubled on average, signalling that the business is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the Australian medical equipment industry has been relatively flat in terms of earnings growth in the prior year, levelling off from a solid 16.05% over the past half a decade. This shows that whatever near-term headwind the industry is enduring, it’s hitting Visioneering Technologies harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Visioneering Technologies may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Visioneering Technologies to get a better picture of the stock by looking at:
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Financial Health: Is VTI’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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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.