Assessing Pelangio Exploration Inc’s (TSXV:PX) 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 Pelangio Exploration is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its metals and mining industry peers. See our latest analysis for PX
Despite a decline, did PX underperform the long-term trend and the industry?
For the most up-to-date info, 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 examine different companies on a similar basis, using the latest information. For Pelangio Exploration, the most recent twelve-month earnings -CA$1M, which, in comparison to the prior year’s level, has become more negative. Since these figures are fairly myopic, I have calculated an annualized five-year value for Pelangio Exploration’s net income, which stands at -CA$2M. This means that, despite the fact that net income is negative, it has become less negative over the years.We can further evaluate Pelangio Exploration’s loss by looking at what’s going on in the industry on top of within the company. First, I want to briefly look into the line items. Revenue growth over last few years has rose by 57.59%, indicating that Pelangio Exploration is in a high-growth period with expenses racing ahead elevated top-line growth rates. Inspecting growth from a sector-level, the Canadian metals and mining industry has been growing average earnings growth of 60.80% over the past year, and a solid 11.97% over the past five years. This means whatever uplift the industry is enjoying, Pelangio Exploration has not been able to gain as much as its industry peers.
What does this mean?
Pelangio Exploration’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Pelangio Exploration may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Pelangio Exploration to get a better picture of the stock by looking at:
1. Financial Health: Is PX’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.