Stock Analysis

Want To Invest In Perma-Fix Environmental Services Inc (NASDAQ:PESI)? Here's How It Performed Lately

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After reading Perma-Fix Environmental Services Inc's (NASDAQ:PESI) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Perma-Fix Environmental Services's performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Perma-Fix Environmental Services

Could PESI beat the long-term trend and outperform its industry?

I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to examine different stocks on a more comparable basis, using the latest information. For Perma-Fix Environmental Services, its most recent earnings (trailing twelve month) is -US$3.09M, which compared to the prior year's figure, has become less negative. Since these values may be relatively short-term, I have created an annualized five-year value for Perma-Fix Environmental Services's net income, which stands at -US$6.36M. This means that, even though net income is negative, it has become less negative over the years.

NasdaqCM:PESI Income Statement Mar 19th 18
NasdaqCM:PESI Income Statement Mar 19th 18
We can further analyze Perma-Fix Environmental Services's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Perma-Fix Environmental Services has seen an annual decline in revenue of -15.58%, 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 US commercial services industry has been growing, albeit, at a muted single-digit rate of 7.15% in the previous twelve months, and 9.53% over the previous five years. This means that, although Perma-Fix Environmental Services is currently loss-making, it may have benefited from 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 difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Perma-Fix Environmental Services may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Perma-Fix Environmental Services to get a more holistic view of the stock by looking at:

  • 1. Financial Health: Is PESI’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 PESI 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 PESI 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 trailing twelve months from 31 December 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.