Measuring ADOMANI Inc’s (NASDAQ:ADOM) 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 ADOM’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for ADOMANI

How Did ADOM’s Recent Performance Stack Up Against Its Past?

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 blend allows me to assess many different companies in a uniform manner using the latest information. For ADOMANI, its latest trailing-twelve-month earnings is -US$21.90M, which, against the prior year’s figure, has become more negative. Given that these values are relatively short-term thinking, I’ve created an annualized five-year figure for ADOM’s earnings, which stands at -US$8.76M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.

We can further analyze ADOMANI’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years ADOMANI’s top-line has increased by 41.51% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the US auto components industry has been growing, albeit, at a subdued single-digit rate of 9.87% in the past twelve months, and a substantial 12.09% over the previous five years. This means any tailwind the industry is enjoying, ADOMANI has not been able to gain as much as its industry peers.

What does this mean?

Though ADOMANI’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most useful step is to assess company-specific issues ADOMANI may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research ADOMANI to get a better picture of the stock by looking at:

• 1. Financial Health: Is ADOM’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.

• 2. 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.