Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess N1 Holdings Limited’s (ASX:N1H) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for N1 Holdings
How N1H fared against its long-term earnings performance and its industry
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 blend enables me to examine different companies in a uniform manner using new information. For N1 Holdings, its latest twelve-month earnings is -A$1.2M, which, relative to last year’s level, has become less negative. Since these figures may be relatively nearsighted, I’ve calculated an annualized five-year figure for N1 Holdings’s net income, which stands at -A$0.6M. This means that, N1 Holdings has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.We can further analyze N1 Holdings’s loss by looking at 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 risen by 29.22%, implying that N1 Holdings is in a high-growth phase with expenses shooting ahead of high top-line growth rates, leading to yearly losses. Eyeballing growth from a sector-level, the Australian mortgage industry has been growing its average earnings by double-digit 13.16% over the previous year, and 13.35% over the past five years. This suggests that any uplift the industry is enjoying, N1 Holdings has not been able to gain as much as its average peer.
What does this mean?
N1 Holdings’s track record can be a valuable insight into its earnings performance, but it certainly 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 insightful step is to examine company-specific issues N1 Holdings may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research N1 Holdings to get a more holistic view of the stock by looking at:
1. Financial Health: Is N1H’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 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.