Measuring MoSys Inc’s (NASDAQ:MOSY) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess MOSY’s recent performance announced on 31 December 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for MoSys
Did MOSY’s recent earnings growth beat the long-term trend and the industry?
For the purpose of this commentary, I like to 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 enables me to analyze many different companies on a similar basis, using the latest information. For MoSys, its most recent bottom-line (trailing twelve month) is -US$10.67M, which, in comparison to the previous year’s figure, has become less negative. Given that these values are relatively myopic, I have calculated an annualized five-year figure for MoSys’s net income, which stands at -US$22.07M. This means despite the fact that net income is negative, it has become less negative over the years.We can further examine MoSys’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years MoSys has seen an annual decline in revenue of -15.38%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US semiconductor industry has been growing its average earnings by double-digit 20.94% over the prior year, and a more muted 7.63% over the past five years. This means that, while MoSys is currently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though MoSys’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues MoSys may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research MoSys to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for MOSY’s future growth? Take a look at our free research report of analyst consensus for MOSY’s outlook.
- 2. Financial Health: Is MOSY’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.