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.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.