For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Invigor Group Limited’s (ASX:IVO) 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 Invigor Group
Did IVO perform worse than its track record and industry?
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 blend enables me to analyze various companies on a similar basis, using the most relevant data points. For Invigor Group, its most recent earnings (trailing twelve month) is -AU$13.15M, which, in comparison to the prior year’s level, has become more negative. Given that these values may be relatively nearsighted, I’ve created an annualized five-year value for Invigor Group’s net income, which stands at -AU$5.51M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.We can further examine Invigor Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Invigor Group has seen an annual decline in revenue of -3.84%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the Australian internet industry has been growing its average earnings by double-digit 15.92% in the previous twelve months, and 10.24% over the past five years. This shows that whatever tailwind the industry is benefiting from, Invigor Group has not been able to realize the gains unlike its average peer.
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 occur going forward, and when. The most useful step is to assess company-specific issues Invigor Group may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Invigor Group to get a better picture of the stock by looking at:
- 1. Financial Health: Is IVO’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.