Was ChemoCentryx Inc’s (NASDAQ:CCXI) Earnings Growth Better Than Industry?

For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on ChemoCentryx Inc (NASDAQ:CCXI) useful as an attempt to give more color around how ChemoCentryx is currently performing. View our latest analysis for ChemoCentryx

How CCXI fared against its long-term earnings performance and its industry

I prefer to use data from the most recent 12 months, 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 blend allows me to analyze many different companies on a more comparable basis, using new information. ChemoCentryx’s latest twelve-month earnings -$29.5M, which, against last year’s level, has become less negative. Given that these values are somewhat short-term, I have calculated an annualized five-year value for ChemoCentryx’s net income, which stands at -$32.7M. This means that, although net income is negative, it has become less negative over the years.

NasdaqGS:CCXI Income Statement Dec 15th 17
NasdaqGS:CCXI Income Statement Dec 15th 17
Additionally, we can examine ChemoCentryx’s loss by looking at what’s going on in the industry along with within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -9.48%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the past year, and 20.18% over the previous five years. This means that, despite the fact that ChemoCentryx is presently loss-making, it may have benefited 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 insightful step is to examine company-specific issues ChemoCentryx may be facing and whether management guidance has steadily been met in the past. You should continue to research ChemoCentryx to get a more holistic view of the stock by looking at:

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

2. Financial Health: Is CCXI’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.