When Hudson Global Inc’s (NASDAQ:HSON) 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 Hudson Global’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not HSON actually performed well. Below is a quick commentary on how I see HSON has performed. Check out our latest analysis for Hudson Global
How Well Did HSON Perform?
For the purpose of this commentary, I like to 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 allows me to examine various companies in a uniform manner using new information. For Hudson Global, the most recent earnings -$1.0M, which, against the prior year’s level, has become less negative. Since these values are somewhat myopic, I have determined an annualized five-year value for Hudson Global’s net income, which stands at -$7.1M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.Additionally, we can evaluate Hudson Global’s loss by looking at what has been happening in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over past few years has been negative at -13.00%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the US professional services industry has been growing, albeit, at a unexciting single-digit rate of 9.80% in the past twelve months, and 9.23% over the past five years. This shows that, despite the fact that Hudson Global is presently running a loss, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
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 hard to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Hudson Global may be facing and whether management guidance has consistently been met in the past. You should continue to research Hudson Global to get a more holistic view of the stock by looking at:
1. Financial Health: Is HSON’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 HSON 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 HSON 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.