Today I will examine Intellia Therapeutics Inc’s (NASDAQ:NTLA) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of NTLA’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to project whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for NTLA
Was NTLA’s weak performance lately a part of a long-term decline?
I prefer to use the ‘latest twelve-month’ data, 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 allows me to analyze different stocks on a more comparable basis, using the latest information. Intellia Therapeutics’s most recent twelve-month earnings -$54.1M, which, in comparison to last year’s figure, has become more negative. Since these figures may be fairly myopic, I’ve created an annualized five-year value for Intellia Therapeutics’s earnings, which stands at -$27.7M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.Additionally, we can evaluate Intellia Therapeutics’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last few years has increased by 81.58%, indicating that Intellia Therapeutics is in a high-growth period with expenses racing ahead elevated top-line growth rates. Eyeballing growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% in the previous twelve months, and 20.18% over the previous few years. This means whatever uplift the industry is deriving benefit from, Intellia Therapeutics has not been able to reap as much as its industry peers.
What does this mean?
Though Intellia Therapeutics’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Intellia Therapeutics may be facing and whether management guidance has steadily been met in the past. You should continue to research Intellia Therapeutics to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for NTLA’s future growth? Take a look at our free research report of analyst consensus for NTLA’s outlook.
2. Financial Health: Is NTLA’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.