Today I will examine Ynvisible Interactive Inc’s (TSXV:YNV) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of YNV’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Ynvisible Interactive
Was YNV’s recent earnings decline worse than the long-term trend and the 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 technique allows me to assess various companies on a similar basis, using the latest information. For Ynvisible Interactive, its most recent earnings (trailing twelve month) is -€322.65K, which, in comparison to the previous year’s figure, has become more negative. Given that these figures may be somewhat short-term, I have computed an annualized five-year figure for YNV’s net income, which stands at -€240.81K. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.We can further examine Ynvisible Interactive’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Ynvisible Interactive has seen an annual decline in revenue of -10.23%, 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 electronic industry has been enduring some headwinds in the past year, leading to an average earnings drop of -20.21%. This is a significant change, given that the industry has constantly been delivering a a robust growth of 12.29% in the past five years. This means whatever recent headwind the industry is experiencing, it’s hitting Ynvisible Interactive harder than its peers.
What does this mean?
Though Ynvisible Interactive’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most useful step is to assess company-specific issues Ynvisible Interactive may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Ynvisible Interactive to get a better picture of the stock by looking at:
- 1. Financial Health: Is YNV’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.