Assessing Parabolic Drugs Limited’s (NSEI:PARABDRUGS) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PARABDRUGS’s recent performance announced on 31 March 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Parabolic Drugs
Were PARABDRUGS’s earnings stronger than its past performances and the industry?
I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to assess various companies on a more comparable basis, using new information. For Parabolic Drugs, its most recent trailing-twelve-month earnings is -₹1.08B, which, against last year’s level, has become less negative. Given that these values are fairly short-term, I’ve created an annualized five-year value for PARABDRUGS’s earnings, which stands at -₹2.00B. This means despite the fact that net income is negative, it has become less negative over the years.We can further evaluate Parabolic Drugs’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Parabolic Drugs has seen an annual decline in revenue of -44.50%, 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 IN pharmaceuticals industry has been growing, albeit, at a muted single-digit rate of 6.50% in the prior year, and a substantial 14.36% over the last five years. This means that, although Parabolic Drugs is currently loss-making, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Parabolic Drugs’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Parabolic Drugs may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Parabolic Drugs to get a more holistic view of the stock by looking at:
- Financial Health: Is PARABDRUGS’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.