Understanding xG Technology Inc’s (NASDAQ:XGTI) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how xG Technology is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for xG Technology
How XGTI fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks in a uniform manner using new information. For xG Technology, its most recent earnings (trailing twelve month) is -US$7.42M, which, in comparison to the prior year’s level, has become less negative. Given that these figures may be somewhat myopic, I have calculated an annualized five-year value for XGTI’s earnings, which stands at -US$21.26M. This shows that, though net income is negative, it has become less negative over the years.We can further assess xG Technology’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years xG Technology’s top-line has increased by 63.72% on average, indicating that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Eyeballing growth from a sector-level, the US communications industry has been relatively flat in terms of earnings growth over the previous few years. This means that though xG Technology is currently running a loss, any near-term headwind the industry is enduring, xG Technology is relatively better-cushioned than its peers.
What does this mean?
xG Technology’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues xG Technology may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research xG Technology to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for XGTI’s future growth? Take a look at our free research report of analyst consensus for XGTI’s outlook.
- 2. Financial Health: Is XGTI’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.