Today I will take a look at Adverum Biotechnologies Inc’s (NASDAQ:ADVM) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the biotechs industry performed. As an investor, I find it beneficial to assess ADVM’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. See our latest analysis for Adverum Biotechnologies
How Well Did ADVM Perform?
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 analyze different stocks on a similar basis, using new information. For Adverum Biotechnologies, its most recent trailing-twelve-month earnings is -US$56.15M, which, in comparison to the prior year’s level, has become less negative. Given that these values are somewhat short-term thinking, I’ve determined an annualized five-year figure for Adverum Biotechnologies’s net income, which stands at -US$51.17M. This means Adverum Biotechnologies has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards to right direction again.We can further assess Adverum Biotechnologies’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Adverum Biotechnologies’s top-line has grown by 37.70% on average, signalling 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 biotechs industry has been growing its average earnings by double-digit 22.93% in the prior twelve months, and 19.88% over the past five years. This means that, although Adverum Biotechnologies is presently loss-making, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues Adverum Biotechnologies may be facing and whether management guidance has regularly been met in the past. You should continue to research Adverum Biotechnologies to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for ADVM’s future growth? Take a look at our free research report of analyst consensus for ADVM’s outlook.
- 2. Financial Health: Is ADVM’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.