Assessing Arena Events Group plc’s (AIM:ARE) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Arena Events Group is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its commercial services industry peers. View our latest analysis for Arena Events Group
How Well Did ARE Perform?
I 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 enables me to examine many different companies on a more comparable basis, using new information. For Arena Events Group, its most recent bottom-line (trailing twelve month) is -UK£3.20M, which, in comparison to the prior year’s level, has become less negative. Since these values may be fairly short-term, I have determined an annualized five-year figure for ARE’s net income, which stands at -UK£3.49M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.We can further analyze Arena Events Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Arena Events Group’s top-line has grown by a mere 8.33%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the UK commercial services industry has been growing its average earnings by double-digit 11.78% in the previous twelve months, and 15.51% over the past half a decade. This suggests that, while Arena Events Group is presently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Arena Events Group’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 predict what will happen in the future and when. The most useful step is to assess company-specific issues Arena Events Group may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Arena Events Group to get a more holistic view of the stock by looking at:
- Financial Health: Is ARE’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.