Examining Everspin Technologies Inc’s (NASDAQ:MRAM) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MRAM’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for Everspin Technologies
Could MRAM beat the long-term trend and outperform its industry?MRAM is loss-making, with the most recent trailing twelve-month earnings of -US$16.29m (from 31 March 2018), which compared to last year has become less negative. Furthermore, the company’s loss seem to be growing over time, with the five-year earnings average of -US$17.97m. Each year, for the past five years MRAM has seen an annual increase in operating expense growth, outpacing revenue growth of 15.54%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Viewing growth from a sector-level, the US semiconductor industry has been growing its average earnings by double-digit 28.19% in the past twelve months, and 14.26% over the past half a decade. This means that whatever uplift the industry is deriving benefit from, Everspin Technologies has not been able to realize the gains unlike its industry peers.
Since Everspin Technologies is currently unprofitable, with operating expenses (opex) growing year-on-year at 16.15%, it may need to raise more cash over the next year. It currently has US$33.88m in cash and short-term investments, however, opex (SG&A and one-year R&D) reached US$42.67m in the latest twelve months. Even though this is analysis is fairly basic, and Everspin Technologies still can cut its overhead in the near future, or raise debt capital instead of coming to equity markets, the analysis still gives us an idea of the company’s timeline and when things will have to start changing, since its current operation is unsustainable.
What does this mean?
Though Everspin Technologies’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 predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Everspin Technologies may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Everspin Technologies to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MRAM’s future growth? Take a look at our free research report of analyst consensus for MRAM’s outlook.
- Financial Health: Is MRAM’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.