Today I will take a look at Selecta Biosciences Inc’s (NASDAQ:SELB) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the biotechs industry performed. As an investor, I find it beneficial to assess SELB’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. See our latest analysis for Selecta Biosciences
Was SELB weak performance lately part of a long-term decline?
To account for any quarterly or half-yearly updates, I 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 allows me to assess various companies on a more comparable basis, using the most relevant data points. For Selecta Biosciences, its most recent bottom-line (trailing twelve month) is -US$65.32M, which, relative to the previous year’s level, has become more negative. Since these figures may be somewhat nearsighted, I’ve created an annualized five-year figure for Selecta Biosciences’s earnings, which stands at -US$38.86M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.We can further analyze Selecta Biosciences’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Selecta Biosciences’s top-line has increased by a mere 4.58%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 22.93% over the previous year, and 20.37% over the previous five years. This means whatever uplift the industry is enjoying, Selecta Biosciences has not been able to leverage it as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Selecta Biosciences may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Selecta Biosciences to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SELB’s future growth? Take a look at our free research report of analyst consensus for SELB’s outlook.
- Financial Health: Is SELB’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.