National American University Holdings Inc (NASDAQ:NAUH): Does The Earnings Decline Make It An Underperformer?

When National American University Holdings Inc (NASDAQ:NAUH) released its most recent earnings update (30 November 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were National American University Holdings’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not NAUH actually performed well. Below is a quick commentary on how I see NAUH has performed. View our latest analysis for National American University Holdings

Did NAUH perform worse than its track record and industry?

To account for any quarterly or half-yearly updates, 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 method enables me to analyze many different companies on a similar basis, using the latest information. For National American University Holdings, its most recent earnings (trailing twelve month) is -US$11.07M, which, in comparison to the prior year’s figure, has become more negative. Since these values are somewhat short-term, I have determined an annualized five-year figure for National American University Holdings’s net income, which stands at US$1.98M.

NasdaqGM:NAUH Income Statement Apr 4th 18
NasdaqGM:NAUH Income Statement Apr 4th 18
We can further analyze National American University Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade National American University Holdings has seen an annual decline in revenue of -4.92%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US consumer services industry has been growing its average earnings by double-digit 13.88% in the prior year, and a less exciting 6.69% over the previous five years. This means any tailwind the industry is enjoying, National American University Holdings has not been able to gain as much as its average peer.

What does this mean?

National American University Holdings’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 predict what will happen in the future and when. The most insightful step is to assess company-specific issues National American University Holdings may be facing and whether management guidance has regularly been met in the past. You should continue to research National American University Holdings to get a better picture of the stock by looking at:

  • 1. Financial Health: Is NAUH’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 November 2017. This may not be consistent with full year annual report figures.