Should You Be Concerned About Staffing 360 Solutions Inc’s (NASDAQ:STAF) -9.34% Earnings Decline?

When Staffing 360 Solutions Inc (NASDAQ:STAF) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Staffing 360 Solutions performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see STAF has performed. Check out our latest analysis for Staffing 360 Solutions

Did STAF perform worse than its track record and industry?

I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to examine different stocks in a uniform manner using the latest information. For Staffing 360 Solutions, its latest trailing-twelve-month earnings is -$9.5M, which, relative to the prior year’s figure, has become more negative. Given that these figures are relatively nearsighted, I’ve computed an annualized five-year figure for STAF’s earnings, which stands at -$7.6M. This doesn’t look much better, as earnings seem to have gradually been getting more and more negative over time.

NasdaqCM:STAF Income Statement Jan 6th 18
NasdaqCM:STAF Income Statement Jan 6th 18
Additionally, we can examine Staffing 360 Solutions’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the last couple of years has grown by 46.37%, indicating that Staffing 360 Solutions is in a high-growth period with expenses shooting ahead of elevated top-line growth rates, leading to yearly losses. Scanning growth from a sector-level, the US professional services industry has been growing its average earnings by double-digit 10.06% in the previous year, and a less exciting 9.29% over the previous five years. This shows that whatever uplift the industry is benefiting from, Staffing 360 Solutions has not been able to gain as much as its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Staffing 360 Solutions may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Staffing 360 Solutions to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for STAF’s future growth? Take a look at our free research report of analyst consensus for STAF’s outlook.

2. Financial Health: Is STAF’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.

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 30 September 2017. This may not be consistent with full year annual report figures.