Intellian Technologies' (KOSDAQ:189300) Shareholders Have More To Worry About Than Only Soft Earnings

Intellian Technologies, Inc.'s (KOSDAQ:189300) recent weak earnings report didn't cause a big stock movement. We think that investors are worried about some weaknesses underlying the earnings.

Check out our latest analysis for Intellian Technologies

To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. Intellian Technologies expanded the number of shares on issue by 17% over the last year. As a result, its net income is now split between a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. You can see a chart of Intellian Technologies' EPS by clicking here.

How Is Dilution Impacting Intellian Technologies' Earnings Per Share (EPS)?

As you can see above, Intellian Technologies has been growing its net income over the last few years, with an annualized gain of 859% over three years. But EPS was only up 626% per year, in the exact same period. Net profit actually dropped by 65% in the last year. But the EPS result was even worse, with the company recording a decline of 68%. And so, you can see quite clearly that dilution is influencing shareholder earnings.

In the long term, if Intellian Technologies' earnings per share can increase, then the share price should too. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Intellian Technologies' Profit Performance

Intellian Technologies issued shares during the year, and that means its EPS performance lags its net income growth. Therefore, it seems possible to us that Intellian Technologies' true underlying earnings power is actually less than its statutory profit. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 2 warning signs for Intellian Technologies and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Intellian Technologies' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.