Measuring DXcom Holdings Limited’s (SEHK:8086) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 8086’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for DX.com Holdings

Could 8086 beat the long-term trend and outperform its industry?

For the purpose of this commentary, I like to 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 enables me to examine various companies in a uniform manner using the most relevant data points. For DX.com Holdings, its latest trailing-twelve-month earnings is -HK$23.2M, which compared to last year’s level, has become less negative. Given that these values may be relatively short-term thinking, I’ve calculated an annualized five-year figure for DX.com Holdings’s net income, which stands at -HK$2.8M. This shows that, DX.com Holdings has historically performed better than recently, while it seems like earnings are now heading back towards to right direction again.

We can further assess DX.com Holdings’s loss by researching what’s going on in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past few years has been negative at -11.89%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the HK internet software and services industry has been growing its average earnings by double-digit 14.72% in the previous twelve months, and 17.90% over the previous five years. This means despite the fact that DX.com Holdings is currently running a loss, it may have gained from industry tailwinds, moving earnings towards to right direction.

What does this mean?

Though DX.com Holdings’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 insightful step is to examine company-specific issues DX.com Holdings may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research DX.com Holdings to get a more holistic view of the stock by looking at: