Did CytRx Corporation's (NASDAQ:CYTR) Recent Earnings Growth Beat The Trend?

Assessing CytRx Corporation's (NASDAQ:CYTR) 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 CYTR's recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. View our latest analysis for CytRx

Were CYTR's earnings stronger than its past performances and the industry?

I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to assess different companies on a more comparable basis, using the latest information. For CytRx, its latest earnings (trailing twelve month) is -US$38.20M, which, against the prior year's figure, has become less negative. Since these figures may be fairly short-term, I’ve computed an annualized five-year figure for CYTR's earnings, which stands at -US$34.80M. This shows that, CytRx has historically performed better than recently, though it seems like earnings are now heading back towards to right direction again.

We can further assess CytRx's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years CytRx has seen an annual decline in revenue of -6.59%, on average. This adverse movement is a driver of the company's inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 12.72% over the prior year, and 19.44% over the past five years. This means despite the fact that CytRx is currently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.

What does this mean?

Though CytRx's past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues CytRx may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research CytRx to get a better picture of the stock by looking at:

• 1. Financial Health: Is CYTR’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.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.