Assessing Endo International plc’s (NASDAQ:ENDP) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ENDP’s recent performance announced on 31 March 2018 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Endo International
How ENDP fared against its long-term earnings performance and its industryENDP is loss-making, with the most recent trailing twelve-month earnings of -US$1.57b (from 31 March 2018), which compared to last year has become less negative. However, the company’s loss seem to be contracting over the medium term, with the five-year earnings average of -US$797.22m. Each year, for the past five years ENDP has seen an annual increase in operating expense growth, outpacing revenue growth of 7.20%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Scanning growth from a sector-level, the US pharmaceuticals industry has been growing its average earnings by double-digit 11.92% in the past year, and a more muted 9.52% over the past half a decade. This means that, while Endo International is currently unprofitable, it may have benefited from industry tailwinds, moving earnings in the right direction.
Even though Endo International is currently unprofitable, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of US$786.83m) over the next year. 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. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most useful step is to assess company-specific issues Endo International may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Endo International to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ENDP’s future growth? Take a look at our free research report of analyst consensus for ENDP’s outlook.
- Financial Health: Is ENDP’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.
- 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.