In this article, I will take a look at Staffing 360 Solutions Inc’s (NASDAQ:STAF) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of STAF’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Staffing 360 Solutions
Was STAF’s recent earnings decline indicative of a tough track record?
For the most up-to-date info, I use data from the most recent 12 months, 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 allows me to analyze various companies in a uniform manner using the most relevant data points. For Staffing 360 Solutions, its most recent bottom-line (trailing twelve month) is -US$20.70M, which, against the previous year’s figure, has become more negative. Since these figures are fairly short-term, I’ve created an annualized five-year value for Staffing 360 Solutions’s net income, which stands at -US$8.16M. This doesn’t look much better, since earnings seem to have gradually been getting more and more negative over time.We can further evaluate Staffing 360 Solutions’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Staffing 360 Solutions’s top-line has grown by 42.98% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the US professional services industry has been growing its average earnings by double-digit 15.00% over the prior year, and 10.12% over the past five years. This means that whatever tailwind the industry is benefiting from, Staffing 360 Solutions has not been able to reap as much as its average peer.
What does this mean?
Staffing 360 Solutions’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Staffing 360 Solutions may be facing and whether management guidance has regularly been met in the past. You should continue to research Staffing 360 Solutions to get a better picture of the stock by looking at:
- 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.
- 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.
- 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.