Stock Analysis

Does Threat Protect Australia Limited's (ASX:TPS) Past Performance Indicate A Stronger Future?

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Assessing Threat Protect Australia Limited's (ASX:TPS) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Threat Protect Australia is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its commercial services industry peers. See our latest analysis for Threat Protect Australia

Commentary On TPS's Past Performance

For the most up-to-date info, 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 method enables me to analyze many different companies in a uniform manner using new information. For Threat Protect Australia, its most recent bottom-line (trailing twelve month) is -AU$45.85K, which, against the previous year's figure, has become less negative. Given that these figures may be relatively myopic, I’ve calculated an annualized five-year figure for TPS's net income, which stands at -AU$2.10M. This means even though net income is negative, it has become less negative over the years.

ASX:TPS Income Statement Mar 13th 18
ASX:TPS Income Statement Mar 13th 18
We can further evaluate Threat Protect Australia's loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Threat Protect Australia's top-line has increased by 26.93% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the Australian commercial services industry has been growing its average earnings by double-digit 17.34% in the past twelve months, and a more subdued 4.66% over the past five years. This means that, though Threat Protect Australia is presently loss-making, it may have been aided by industry tailwinds, moving earnings into a more favorable position.

What does this mean?

Threat Protect Australia'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 difficult to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Threat Protect Australia may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Threat Protect Australia to get a better picture of the stock by looking at:

  • 1. Financial Health: Is TPS’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. Valuation: What is TPS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TPS is currently mispriced by the market.
  • 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 31 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.