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 Bio-Path Holdings Inc (NASDAQ:BPTH) useful as an attempt to give more color around how Bio-Path Holdings is currently performing. View our latest analysis for Bio-Path Holdings
Commentary On BPTH’s Past Performance
For the purpose of this commentary, I like to use 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 examine many different companies on a more comparable basis, using the latest information. For Bio-Path Holdings, its most recent bottom-line (trailing twelve month) is -US$8.06M, which compared to last year’s figure, has become more negative. Given that these values are relatively myopic, I have estimated an annualized five-year figure for BPTH’s net income, which stands at -US$4.40M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.We can further examine Bio-Path Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Bio-Path Holdings’s top-line more than doubled on average, signalling that the business is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Viewing growth from a sector-level, the US pharmaceuticals industry has been growing its average earnings by double-digit 13.53% in the previous twelve months, and a more muted 9.89% over the last five years. This means that whatever uplift the industry is deriving benefit from, Bio-Path Holdings has not been able to reap as much as its industry peers.
What does this mean?
Though Bio-Path Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Bio-Path Holdings may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Bio-Path Holdings to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is BPTH’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.