AngioDynamics (NASDAQ:ANGO) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Despite announcing strong earnings, AngioDynamics, Inc.'s (NASDAQ:ANGO) stock was sluggish. Our analysis uncovered some concerning factors that we believe the market might be paying attention to.

See our latest analysis for AngioDynamics

How Do Unusual Items Influence Profit?

Importantly, our data indicates that AngioDynamics' profit received a boost of US$18m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that's exactly what the accounting terminology implies. We can see that AngioDynamics' positive unusual items were quite significant relative to its profit in the year to August 2023. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On AngioDynamics' Profit Performance

As previously mentioned, AngioDynamics' large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that AngioDynamics' underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into AngioDynamics, you'd also look into what risks it is currently facing. While conducting our analysis, we found that AngioDynamics has 1 warning sign and it would be unwise to ignore this.

Today we've zoomed in on a single data point to better understand the nature of AngioDynamics' profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.