New Talisman Gold Mines Limited (NZE:NTL): Has Recent Earnings Growth Beaten Long-Term Trend?

When New Talisman Gold Mines Limited (NZSE:NTL) announced its most recent earnings (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well New Talisman Gold Mines has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see NTL has performed. View our latest analysis for New Talisman Gold Mines

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

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to analyze different stocks on a more comparable basis, using new information. For New Talisman Gold Mines, its latest trailing-twelve-month earnings is -NZ$870.41K, which, against the prior year's level, has become less negative. Since these figures are fairly short-term thinking, I’ve created an annualized five-year value for New Talisman Gold Mines's net income, which stands at -NZ$1.22M. This means despite the fact that net income is negative, it has become less negative over the years.

We can further examine New Talisman Gold Mines's loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years New Talisman Gold Mines's revenue growth has been fairly muted, with an annual growth rate of -0.38%, on average. The company's inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the NZ metals and mining industry has been growing its average earnings by double-digit 44.82% over the previous year, and a more subdued 2.58% over the previous five years. This suggests that, even though New Talisman Gold Mines is presently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.

What does this mean?

New Talisman Gold Mines's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that incur net loss is always difficult to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues New Talisman Gold Mines may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research New Talisman Gold Mines to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is NTL’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. 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.