When Biomark Diagnostics Inc’s (DB:20B) announced its latest earnings (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Biomark Diagnostics’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 20B actually performed well. Below is a quick commentary on how I see 20B has performed. See our latest analysis for Biomark Diagnostics
Did 20B’s recent earnings growth beat the long-term trend and the industry?
I look at 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 technique allows me to examine different stocks on a more comparable basis, using the latest information. For Biomark Diagnostics, its latest trailing-twelve-month earnings is -CA$817.04K, which, against last year’s figure, has become less negative. Given that these values are relatively short-term, I’ve computed an annualized five-year value for 20B’s net income, which stands at -CA$1.46M. This shows that, while net income is negative, it has become less negative over the years.We can further analyze Biomark Diagnostics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Biomark Diagnostics has seen its revenue fall by more than half, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the DE biotechs industry has been growing its average earnings by double-digit 21.32% over the previous year, and 19.21% over the previous five years. This suggests that, while Biomark Diagnostics is currently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
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 hard to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues Biomark Diagnostics may be facing and whether management guidance has dependably been met in the past. You should continue to research Biomark Diagnostics to get a better picture of the stock by looking at:
- 1. Financial Health: Is 20B’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.