When NanoVibronix Inc (NASDAQ:NAOV) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well NanoVibronix has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see NAOV has performed. View our latest analysis for NanoVibronix
Was NAOV’s recent earnings decline worse than the long-term trend and the industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 analyze different stocks on a more comparable basis, using new information. For NanoVibronix, its most recent bottom-line (trailing twelve month) is -US$4.44M, which compared to the previous year’s figure, has become more negative. Given that these values are somewhat myopic, I have estimated an annualized five-year value for NanoVibronix’s earnings, which stands at -US$2.48M. This doesn’t seem to paint a better picture, since earnings seem to have consistently been getting more and more negative over time.We can further analyze NanoVibronix’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years NanoVibronix’s top-line has risen by a mere 4.09%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 10.69% over the previous year, and a less exciting 9.16% over the past half a decade. This means that whatever uplift the industry is deriving benefit from, NanoVibronix has not been able to realize the gains unlike its industry peers.
What does this mean?
Though NanoVibronix’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most useful step is to examine company-specific issues NanoVibronix may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research NanoVibronix to get a better picture of the stock by looking at:
- 1. Financial Health: Is NAOV’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.