Understanding NGSC Limited’s (SGX:B07) 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 NGSC is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. Check out our latest analysis for NGSC
How B07 fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I 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 different companies in a uniform manner using the most relevant data points. For NGSC, its latest earnings (trailing twelve month) is -S$1.90M, which compared to the previous year’s figure, has become less negative. Given that these values may be relatively short-term, I have calculated an annualized five-year value for NGSC’s earnings, which stands at -S$1.98M. This means although net income is negative, it has become less negative over the years.We can further examine NGSC’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade NGSC has seen an annual decline in revenue of -41.71%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the SG telecom industry has been growing its average earnings by double-digit 43.87% over the prior twelve months, and a more muted 2.59% over the last five years. This means that, even though NGSC is currently unprofitable, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues NGSC may be facing and whether management guidance has consistently been met in the past. You should continue to research NGSC to get a better picture of the stock by looking at:
- 1. Financial Health: Is B07’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.