Was Alder Biopharmaceuticals Inc’s (NASDAQ:ALDR) Earnings Decline Part Of A Broader Industry Downturn?

Examining Alder Biopharmaceuticals Inc’s (NASDAQ:ALDR) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ALDR’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. See our latest analysis for Alder Biopharmaceuticals

How Did ALDR’s Recent Performance Stack Up Against Its Past?

ALDR is loss-making, with the most recent trailing twelve-month earnings of -US$306.12m (from 31 March 2018), which compared to last year has become more negative. However, the company’s loss seem to be contracting over the medium term, with the five-year earnings average of -US$101.77m. Each year, for the past five years ALDR has seen an annual decline in revenue of -33.26%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Viewing growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% over the past twelve months, and 17.77% over the previous five years. This means any uplift the industry is enjoying, Alder Biopharmaceuticals has not been able to leverage it as much as its average peer.
NasdaqGM:ALDR Income Statement June 19th 18
NasdaqGM:ALDR Income Statement June 19th 18

Even though Alder Biopharmaceuticals is currently unprofitable, it has an ample cash cushion (US$330.96m) to pay for its upcoming operating expenses over the next couple of years. This is a strong indication of good cash management.

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 hard to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Alder Biopharmaceuticals may be facing and whether management guidance has consistently been met in the past. You should continue to research Alder Biopharmaceuticals to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ALDR’s future growth? Take a look at our free research report of analyst consensus for ALDR’s outlook.
  2. Financial Health: Is ALDR’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 31 March 2018. This may not be consistent with full year annual report figures.