Does Puma Biotechnology Inc's (NASDAQ:PBYI) Past Performance Indicate A Weaker Future?

Examining how Puma Biotechnology Inc (NASDAQ:PBYI) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how Puma Biotechnology is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechs industry peers. Check out our latest analysis for Puma Biotechnology

Commentary On PBYI's Past Performance

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to assess various companies on a more comparable basis, using the most relevant data points. For Puma Biotechnology, its latest trailing-twelve-month earnings is -US$291.95M, which, in comparison to the previous year's level, has become more negative. Given that these values may be somewhat nearsighted, I have estimated an annualized five-year value for PBYI's net income, which stands at -US$157.16M. This doesn't look much better, since earnings seem to have consistently been getting more and more negative over time.

We can further assess Puma Biotechnology's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Puma Biotechnology's top-line more than doubled on average, implying that the business is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Eyeballing growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 23.61% over the previous twelve months, and 20.00% over the previous five years. This suggests that whatever uplift the industry is enjoying, Puma Biotechnology has not been able to realize the gains unlike its industry peers.

What does this mean?

Though Puma Biotechnology'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 examine company-specific issues Puma Biotechnology may be facing and whether management guidance has steadily been met in the past. You should continue to research Puma Biotechnology to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for PBYI’s future growth? Take a look at our free research report of analyst consensus for PBYI’s outlook.
• 2. Financial Health: Is PBYI’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 trailing twelve months from 31 December 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.