Assessing Soleno Therapeutics Inc’s (NASDAQ:SLNO) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Soleno Therapeutics is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechs industry peers. View our latest analysis for Soleno Therapeutics
Was SLNO’s recent earnings decline indicative of a tough track record?
I 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 blend allows me to analyze different companies on a similar basis, using new information. For Soleno Therapeutics, its most recent bottom-line (trailing twelve month) is -US$12.07M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be fairly nearsighted, I have estimated an annualized five-year value for SLNO’s net income, which stands at -US$11.91M. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.We can further examine Soleno 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 Soleno Therapeutics’s top-line has increased by 16.38% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% over the prior twelve months, and 18.46% over the past five. This shows that whatever uplift the industry is enjoying, Soleno Therapeutics has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues Soleno Therapeutics may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Soleno Therapeutics to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SLNO’s future growth? Take a look at our free research report of analyst consensus for SLNO’s outlook.
- Financial Health: Is SLNO’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.