After reading Oryzon Genomics SA’s (BME:ORY) latest earnings update (31 March 2018), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether ORY has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways. View out our latest analysis for Oryzon Genomics
Commentary On ORY’s Past PerformanceORY is loss-making, with the most recent trailing twelve-month earnings of -€4.93m (from 31 March 2018), which compared to last year has become less negative. However, the company’s loss seem to be contracting over the medium term, with the five-year earnings average of -€2.17m. Each year, for the past five years ORY has seen an annual decline in revenue of -3.04%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Eyeballing growth from a sector-level, the ES biotechs industry has been growing its average earnings by double-digit 21.75% over the prior twelve months, and 17.18% over the previous five years. This shows that whatever tailwind the industry is deriving benefit from, Oryzon Genomics has not been able to realize the gains unlike its average peer.
Even though Oryzon Genomics is currently unprofitable, it has an ample cash cushion (€30.90m) to pay for its upcoming operating expenses over the next couple of years. This is a strong indication of good cash management.
What does this mean?
Oryzon Genomics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Oryzon Genomics may be facing and whether management guidance has regularly been met in the past. You should continue to research Oryzon Genomics to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ORY’s future growth? Take a look at our free research report of analyst consensus for ORY’s outlook.
- Financial Health: Is ORY’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.
- 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.