Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Spotless Group Holdings Limited’s (ASX:SPO) 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. View our latest analysis for Spotless Group Holdings
How Well Did SPO Perform?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to assess various companies on a similar basis, using the most relevant data points. For Spotless Group Holdings, its most recent bottom-line (trailing twelve month) is -AU$28.90M, which, against last year’s figure, has become less negative. Given that these figures may be relatively nearsighted, I’ve estimated an annualized five-year figure for SPO’s net income, which stands at -AU$18.07M. This means Spotless Group Holdings has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards a more favorable position once more.We can further analyze Spotless Group Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Spotless Group Holdings’s top-line has increased by a mere 2.52%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the Australian commercial services industry has been growing its average earnings by double-digit 26.03% in the previous year, and 12.89% over the last five years. This shows that, although Spotless Group Holdings is presently loss-making, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
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 predict what will happen in the future and when. The most valuable step is to examine company-specific issues Spotless Group Holdings may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Spotless Group Holdings to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for SPO’s future growth? Take a look at our free research report of analyst consensus for SPO’s outlook.
- 2. Financial Health: Is SPO’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.