Understanding African Battery Metals Plc’s (AIM:ABM) 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 African Battery Metals is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for African Battery Metals
How Well Did ABM Perform?
For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 technique allows me to assess various companies in a uniform manner using the most relevant data points. For African Battery Metals, its most recent earnings (trailing twelve month) is -UK£3.94M, which compared to the prior year’s level, has become more negative. Since these figures may be fairly nearsighted, I have determined an annualized five-year value for African Battery Metals’s earnings, which stands at -UK£1.77M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.We can further examine African Battery Metals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years African Battery Metals has seen its revenue fall by more than half, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the UK metals and mining industry has been growing its average earnings by double-digit 33.67% over the past twelve months, . This is a change from a volatile drop of -3.33% in the past couple of years. This shows that any uplift the industry is enjoying, African Battery Metals has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues African Battery Metals may be facing and whether management guidance has regularly been met in the past. You should continue to research African Battery Metals to get a better picture of the stock by looking at:
- Financial Health: Is ABM’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.