Does Rambler Metals and Mining PLC's (LON:RMM) Latest Financial Perfomance Look Strong?

When Rambler Metals and Mining PLC's (AIM:RMM) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Rambler Metals and Mining's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not RMM actually performed well. Below is a quick commentary on how I see RMM has performed. See our latest analysis for Rambler Metals and Mining

Were RMM's earnings stronger than its past performances and the industry?

To account for any quarterly or half-yearly updates, I 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 enables me to assess various companies on a similar basis, using new information. For Rambler Metals and Mining, its most recent trailing-twelve-month earnings is -US$315.00K, which, relative to last year’s level, has become less negative. Given that these figures may be somewhat myopic, I have calculated an annualized five-year value for Rambler Metals and Mining's net income, which stands at -US$1.28M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.

We can further analyze Rambler Metals and Mining's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Rambler Metals and Mining's top-line has increased by 15.68% on average, signalling that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the UK metals and mining industry has been growing its average earnings by double-digit 43.31% in the previous twelve months, . This is a change from a volatile drop of -7.77% in the previous couple of years. This shows that, while Rambler Metals and Mining is presently running a loss, it may have only just been aided by the recent industry expansion, moving earnings in the right direction.

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 forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Rambler Metals and Mining may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Rambler Metals and Mining to get a better picture of the stock by looking at:

• 1. Financial Health: Is RMM’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.
• 2. Valuation: What is RMM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RMM is currently mispriced by the market.
• 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 trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.