Measuring Obsidian Energy Ltd’s (TSX:OBE) 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 OBE’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Obsidian Energy
How Well Did OBE Perform?
I look at 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 method enables me to assess different companies on a more comparable basis, using new information. For Obsidian Energy, the most recent earnings -CA$258M, which compared to the prior year’s level, has become less negative. Since these figures are relatively myopic, I’ve determined an annualized five-year figure for Obsidian Energy’s net income, which stands at -CA$647M. This shows that, even though net income is negative, it has become less negative over the years.We can further examine Obsidian Energy’s loss by researching what’s going on in the industry on top of within the company. First, I want to quickly look into the line items. Revenue growth over last few years has been negative at -21.26%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting growth from a sector-level, the Canadian oil, gas and consumable fuels industry has been relatively flat in terms of earnings growth over the past few years. This shows that any near-term headwind the industry is experiencing, Obsidian Energy is less exposed compared to 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 hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues Obsidian Energy may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Obsidian Energy to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OBE’s future growth? Take a look at our free research report of analyst consensus for OBE’s outlook.
2. Financial Health: Is OBE’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.