When Sangamo Therapeutics Inc (NASDAQ:SGMO) announced its most recent earnings (31 December 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Sangamo Therapeutics performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see SGMO has performed. Check out our latest analysis for Sangamo Therapeutics
Could SGMO beat the long-term trend and outperform its industry?
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to analyze many different companies on a more comparable basis, using the latest information. For Sangamo Therapeutics, its latest trailing-twelve-month earnings is -US$54.57M, which, relative to the prior year’s level, has become less negative. Since these values are somewhat short-term, I’ve estimated an annualized five-year value for Sangamo Therapeutics’s earnings, which stands at -US$38.93M. This means Sangamo Therapeutics has historically performed better than recently, although it seems like earnings are now heading back towards a more favorable position once more.We can further examine Sangamo Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Sangamo Therapeutics’s top-line has risen by 11.09% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% in the previous year, and 19.47% over the past half a decade. This suggests that, although Sangamo Therapeutics is currently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Sangamo Therapeutics’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 Sangamo Therapeutics may be facing and whether management guidance has dependably been met in the past. You should continue to research Sangamo Therapeutics to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SGMO’s future growth? Take a look at our free research report of analyst consensus for SGMO’s outlook.
- Financial Health: Is SGMO’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.