Understanding how Stone Energy Corporation (NYSE:SGY) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Stone Energy is doing by comparing its latest earnings with its long-term trend as well as the performance of its oil and gas industry peers. See our latest analysis for Stone Energy
How Did SGY’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, 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 enables me to assess different stocks on a more comparable basis, using the most relevant data points. For Stone Energy, its most recent trailing-twelve-month earnings is -US$381.18M, which, relative to last year’s level, has become less negative. Since these values may be somewhat short-term thinking, I have created an annualized five-year value for Stone Energy’s earnings, which stands at -US$234.49M. This means that, Stone Energy has historically performed better than recently, even though it seems like earnings are now heading back towards to right direction again.We can further assess Stone Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Stone Energy has seen an annual decline in revenue of -12.79%, 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 oil and gas industry has been growing its average earnings by double-digit 18.57% in the past year, . This is a change from a volatile drop of -8.65% in the previous few years. This shows that, while Stone Energy is presently loss-making, it may have only just gained from the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
Stone Energy’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 difficult to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Stone Energy may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Stone Energy to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for SGY’s future growth? Take a look at our free research report of analyst consensus for SGY’s outlook.
- 2. Financial Health: Is SGY’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.