Assessing Invitrocue Limited’s (ASX:IVQ) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess IVQ’s recent performance announced on 30 June 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for IVQ
Were IVQ’s earnings stronger than its past performances and the industry?
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 enables me to analyze different companies on a similar basis, using the latest information. For Invitrocue, the most recent bottom-line -SGD1.8M, which, in comparison to last year’s level, has become less negative. Since these figures are somewhat nearsighted, I have estimated an annualized five-year value for Invitrocue’s earnings, which stands at -SGD17.7M. This suggests that, although net income is negative, it has become less negative over the years.Additionally, we can evaluate Invitrocue’s loss by researching what’s going on in the industry on top of within the company. Initially, I want to quickly look into the line items. Revenue growth over past few years has rose by 47.00%, indicating that Invitrocue is in a high-growth phase with expenses racing ahead high top-line growth rates. Inspecting growth from a sector-level, the Australian biotechnology industry has been growing, albeit, at a unexciting single-digit rate of 9.22% in the past year, and a substantial 31.57% over the previous five years. This shows that, though Invitrocue is presently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Invitrocue’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues Invitrocue may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Invitrocue to get a more holistic view of the stock by looking at:
1. Financial Health: Is IVQ’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.