Understanding Ophir Energy Plc’s (LSE:OPHR) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Ophir Energy is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for Ophir Energy
How Did OPHR’s Recent Performance Stack Up Against Its Past?
I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to examine various companies on a similar basis, using new information. Ophir Energy’s latest twelve-month earnings -$113.6M, which compared to the prior year’s level, has become less negative. Given that these figures may be somewhat short-term thinking, I have created an annualized five-year value for OPHR’s earnings, which stands at -$103.0M. This shows that, Ophir Energy has historically performed better than recently, even though it seems like earnings are now heading back in the right direction again.We can further examine Ophir Energy’s loss by looking at what has been happening in the industry along with within the company. Firstly, I want to briefly look into the line items. Revenue growth over last few years has increased by 19.34%, signalling that Ophir Energy is in a high-growth phase with expenses racing ahead elevated top-line growth rates. Scanning growth from a sector-level, the UK oil, gas and consumable fuels industry has been ramping up average earnings growth of 61.62% in the past year, and a flatter -0.73% over the past five. This means whatever uplift the industry is profiting from, Ophir Energy has not been able to realize the gains unlike its industry peers.
What does this mean?
Though Ophir Energy’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Ophir Energy may be facing and whether management guidance has regularly been met in the past. You should continue to research Ophir Energy to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OPHR’s future growth? Take a look at our free research report of analyst consensus for OPHR’s outlook.
2. Financial Health: Is OPHR’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.
3. 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.NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.