When Valdor Technology International Inc (TSXV:VTI) announced its most recent earnings (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Valdor Technology International has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see VTI has performed. Check out our latest analysis for Valdor Technology International
Did VTI’s recent EPS Growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to analyze various companies on a more comparable basis, using new information. Valdor Technology International’s most recent twelve-month earnings -$0.5M, which, in comparison to last year’s level, has become less negative. Since these values may be relatively short-term thinking, I have computed an annualized five-year value for Valdor Technology International’s earnings, which stands at -$1.3M. This shows that, though net income is negative, it has become less negative over the years.We can further evaluate Valdor Technology International’s loss by researching what has been happening in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over past couple of years has been negative at -9.21%. The key to profitability here is to make sure the company’s cost growth is well-managed. Inspecting growth from a sector-level, the Canadian communications equipment industry has been enduring severe headwinds over the previous year, leading to an average earnings drop of -72.87%. This is a substantial change, given that the industry has constantly been delivering a a robust growth of 35.67% in the past couple of years. This means whatever near-term headwind the industry is facing, Valdor Technology International is less exposed compared to its peers.
What does this mean?
Valdor Technology International’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 valuable step is to examine company-specific issues Valdor Technology International may be facing and whether management guidance has consistently been met in the past. You should continue to research Valdor Technology International to get a more holistic view of the stock by looking at:
1. Financial Health: Is VTI’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. Valuation: What is VTI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether VTI is currently mispriced by the market.
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.