Mannatech Incorporated's (NASDAQ:MTEX) Earnings Declined -61.52%, But How Did It Fare Against The Industry?

For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Mannatech Incorporated (NASDAQ:MTEX) useful as an attempt to give more color around how Mannatech is currently performing. Check out our latest analysis for Mannatech

How Did MTEX's Recent Performance Stack Up Against Its Past?

For the purpose of this commentary, I like to 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 examine various companies on a more comparable basis, using the latest information. For Mannatech, its most recent trailing-twelve-month earnings is $0.8M, which, relative to the previous year's figure, has fallen by a substantial -61.52%. Given that these figures are relatively short-term thinking, I’ve created an annualized five-year value for MTEX's net income, which stands at -$1.6M. This means although earnings declined from last year, over a longer period of time, Mannatech's earnings have been increasing on average.

What's the driver of this growth? Let's take a look at whether it is merely due to an industry uplift, or if Mannatech has experienced some company-specific growth. In the last couple of years, Mannatech grew bottom-line, while its top-line fell, by effectively controlling its costs. This has led to to a margin expansion and profitability over time. Viewing growth from a sector-level, the US personal products industry has been growing its average earnings by double-digit 17.37% in the past year, and 11.86% over the past five. This means that any tailwind the industry is profiting from, Mannatech has not been able to leverage it as much as its industry peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research Mannatech to get a more holistic view of the stock by looking at:

1. Financial Health: Is MTEX’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. Valuation: What is MTEX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MTEX is currently mispriced by the market.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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.