Has Tenth Avenue Petroleum Corp (CVE:TPC) Improved Earnings Growth In Recent Times?

For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Tenth Avenue Petroleum Corp's (TSXV:TPC) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for Tenth Avenue Petroleum

Commentary On TPC's Past Performance

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 technique enables me to analyze different stocks in a uniform manner using new information. For Tenth Avenue Petroleum, its most recent earnings (trailing twelve month) is -CA$81.26K, which, in comparison to the previous year's level, has become less negative. Given that these values are relatively nearsighted, I’ve determined an annualized five-year value for TPC's net income, which stands at -CA$2.29M. This suggests that, even though net income is negative, it has become less negative over the years.

We can further evaluate Tenth Avenue Petroleum's loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Tenth Avenue Petroleum has seen an annual decline in revenue of -31.38%, on average. This adverse movement is a driver of the company's inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the Canadian oil and gas industry has been growing average earnings growth of 50.18% over the prior year, and a flatter 1.03% over the past half a decade. This means even though Tenth Avenue Petroleum is presently loss-making, it may have benefited from industry tailwinds, moving earnings towards to right direction.

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 insightful step is to examine company-specific issues Tenth Avenue Petroleum may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Tenth Avenue Petroleum to get a more holistic view of the stock by looking at:

1. Financial Health: Is TPC’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 trailing twelve months from 30 September 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.