Analyzing TimkenSteel Corporation’s (NYSE:TMST) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess TMST’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for TimkenSteel
Was TMST’s recent earnings decline worse than the long-term trend and the industry?
For the purpose of this commentary, 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 enables me to examine different companies on a similar basis, using the most relevant data points. TimkenSteel’s latest earnings -$77M, which compared to the prior year’s figure, has become more negative. Given that these values may be somewhat short-term, I’ve determined an annualized five-year value for TMST’s net income, which stands at $22M.Additionally, we can examine TimkenSteel’s loss by looking at what has been happening in the industry on top of within the company. First, I want to quickly look into the line items. Revenue growth over past few years has been negative at -9.42%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Scanning growth from a sector-level, the US metals and mining industry has been growing its average earnings by double-digit 20.14% in the prior year, . This is a turnaround from a volatile drop of -16.70% in the last few years. This suggests that any uplift the industry is enjoying, TimkenSteel has not been able to leverage it as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most insightful step is to assess company-specific issues TimkenSteel may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research TimkenSteel to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TMST’s future growth? Take a look at our free research report of analyst consensus for TMST’s outlook.
2. Financial Health: Is TMST’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.