Does Pilbara Minerals Limited's (ASX:PLS) 68.8% EPS Growth Reflect The Long-Term Trend?

Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Pilbara Minerals Limited's (ASX:PLS) 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. Check out our latest analysis for Pilbara Minerals

Did PLS's recent EPS Growth beat the long-term trend and the industry?

I use the ‘latest twelve-month’ data, 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 allows me to analyze various companies on a more comparable basis, using the latest information. Pilbara Minerals's latest twelve-month earnings -A$26.0M, which, in comparison to the previous year's figure, has become less negative. Given that these values are fairly nearsighted, I’ve created an annualized five-year figure for PLS's earnings, which stands at -A$19.1M. This suggests that, Pilbara Minerals has historically performed better than recently, while it seems like earnings are now heading back towards a more favorable position once more.

We can further examine Pilbara Minerals's loss by researching what has been happening in the industry on top of within the company. First, I want to briefly look into the line items. Revenue growth over past couple of years has rose by 88.87%, signalling that Pilbara Minerals is in a high-growth period with expenses shooting ahead of high top-line growth rates. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a subdued single-digit rate of 6.76% in the past twelve months, and a substantial 10.06% over the past couple of years. This means that, even though Pilbara Minerals is presently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.

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 difficult to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Pilbara Minerals may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Pilbara Minerals to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for PLS’s future growth? Take a look at our free research report of analyst consensus for PLS’s outlook.

2. Financial Health: Is PLS’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.

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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.