Analyzing Qt Group Oyj’s (HLSE:QTCOM) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess QTCOM’s recent performance announced on 31 March 2018 and compare these figures to its long-term trend and industry movements. See our latest analysis for Qt Group Oyj
Was QTCOM weak performance lately part of a long-term decline?QTCOM is loss-making, with the most recent trailing twelve-month earnings of -€3.08m (from 31 March 2018), which compared to last year has become more negative. However, the company’s loss seem to be contracting over the medium term, with the five-year earnings average of -€1.73m. Each year, for the past five years QTCOM has seen an annual increase in operating expense growth, outpacing revenue growth of 16.31%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Scanning growth from a sector-level, the FI software industry has been enduring some headwinds in the previous year, leading to an average earnings drop of -23.33%. This is a major change, given that the industry has constantly been delivering a a strong growth of 11.58% in the past five years. This shows that although Qt Group Oyj is currently loss-making, any recent headwind the industry is experiencing, the impact on Qt Group Oyj has been softer relative to its peers.
Even though Qt Group Oyj is currently unprofitable, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of €3.99m) over the next year. This is a strong indication of good cash management.
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 difficult to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Qt Group Oyj may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Qt Group Oyj to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for QTCOM’s future growth? Take a look at our free research report of analyst consensus for QTCOM’s outlook.
- Financial Health: Is QTCOM’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.