Does InnSuites Hospitality Trust’s (NYSEMKT:IHT) Past Performance Indicate A Stronger Future?

Today I will take a look at InnSuites Hospitality Trust’s (AMEX:IHT) most recent earnings update (31 October 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the hospitality industry performed. As an investor, I find it beneficial to assess IHT’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for InnSuites Hospitality Trust

Did IHT’s recent earnings growth beat the long-term trend and the industry?

For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 assess many different companies on a more comparable basis, using new information. For InnSuites Hospitality Trust, its most recent trailing-twelve-month earnings is -US$1.96M, which compared to the prior year’s level, has become less negative. Since these values may be fairly nearsighted, I have determined an annualized five-year figure for IHT’s net income, which stands at -US$1.63M. This shows that, InnSuites Hospitality Trust has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.

AMEX:IHT Income Statement Mar 26th 18
AMEX:IHT Income Statement Mar 26th 18
We can further assess InnSuites Hospitality Trust’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years InnSuites Hospitality Trust has seen an annual decline in revenue of -5.65%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 14.79% over the prior year, and 11.58% over the last five years. This means despite the fact that InnSuites Hospitality Trust is currently unprofitable, it may have gained from industry tailwinds, moving earnings in the right direction.

What does this mean?

Though InnSuites Hospitality Trust’s past data is helpful, it is only one aspect of my investment thesis. 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 InnSuites Hospitality Trust may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research InnSuites Hospitality Trust to get a more holistic view of the stock by looking at:

  • 1. Financial Health: Is IHT’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 31 October 2017. This may not be consistent with full year annual report figures.