Has Catasys Inc (NASDAQ:CATS) Improved Earnings Growth In Recent Times?

Examining Catasys Inc's (NASDAQ:CATS) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CATS's latest performance announced on 30 September 2017 and weigh these figures against its longer term trend and industry movements. See our latest analysis for Catasys

Commentary On CATS's Past Performance

I look at 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 technique enables me to assess different stocks in a uniform manner using the most relevant data points. For Catasys, its most recent bottom-line (trailing twelve month) is -US$12.43M, which, in comparison to the previous year's level, has become less negative. Since these figures are fairly myopic, I’ve estimated an annualized five-year figure for Catasys's net income, which stands at -US$14.23M. This means that, though net income is negative, it has become less negative over the years.

We can further assess Catasys's loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Catasys's top-line has risen by 49.45% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the US healthcare industry has been growing, albeit, at a unexciting single-digit rate of 8.71% over the previous twelve months, and a substantial 10.06% over the last five years. This means though Catasys is currently loss-making, it may have been aided by industry tailwinds, moving earnings towards to right direction.

What does this mean?

Catasys'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 predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Catasys may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Catasys to get a more holistic view of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for CATS’s future growth? Take a look at our free research report of analyst consensus for CATS’s outlook.
• 2. Financial Health: Is CATS’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.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.