For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on StarDSL AG (DB:IKHK) useful as an attempt to give more color around how StarDSL is currently performing. View our latest analysis for StarDSL
How Did IKHK’s Recent Performance Stack Up Against Its Past?
I prefer to 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 technique allows me to examine various companies in a uniform manner using the latest information. For StarDSL, its most recent bottom-line (trailing twelve month) is -€288.97K, which compared to last year’s level, has become less negative. Since these values are somewhat nearsighted, I have estimated an annualized five-year value for StarDSL’s earnings, which stands at -€3.00M. This means even though net income is negative, it has become less negative over the years.We can further assess StarDSL’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years StarDSL’s top-line has risen by 42.42% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the DE telecom industry has been growing, albeit, at a muted single-digit rate of 9.10% over the past twelve months, and 4.78% over the previous five years. This means while StarDSL is currently loss-making, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
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 forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues StarDSL may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research StarDSL to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Financial Health: Is IKHK’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
- 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.