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 Mondo TV Sp.A. (BIT:MTV) useful as an attempt to give more color around how Mondo TV is currently performing. See our latest analysis for Mondo TV

Commentary On MTV’s Past Performance

To account for any quarterly or half-yearly updates, 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 technique enables me to analyze different stocks on a similar basis, using new information. For Mondo TV, its latest earnings (trailing twelve month) is €12.98M, which, relative to the prior year’s level, has escalated by over 100%. Given that these values may be somewhat short-term thinking, I have estimated an annualized five-year figure for MTV’s earnings, which stands at €2.08M This means that, generally, Mondo TV has been able to increasingly raise its earnings over the last couple of years as well.

How has it been able to do this? Well, let’s take a look at whether it is only due to an industry uplift, or if Mondo TV has seen some company-specific growth. Over the past few years, Mondo TV grew its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the IT media industry has been relatively flat in terms of earnings growth over the previous couple of years. This means any recent headwind the industry is facing, Mondo TV is relatively better-cushioned than its peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. 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 Mondo TV to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for MTV’s future growth? Take a look at our free research report of analyst consensus for MTV’s outlook.

• 2. Financial Health: Is MTV’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.

• 3. 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 30 September 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.