Measuring Cinedigm Corp’s (NASDAQ:CIDM) 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 CIDM’s recent performance announced on 30 September 2017 and weigh these figures against its long-term trend and industry movements. See our latest analysis for Cinedigm
How Did CIDM’s Recent Performance Stack Up Against Its Past?
I use the ‘latest twelve-month’ data, 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 technique allows me to analyze many different companies in a uniform manner using the latest information. For Cinedigm, its most recent earnings is -$23.1M, which, against last year’s figure, has become more negative. Given that these values may be fairly short-term thinking, I have computed an annualized five-year value for CIDM’s earnings, which stands at -$22.5M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further analyze Cinedigm’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last couple of years has grown by a mere 6.11%. Since top-line growth is also pretty stale the key to profitability moving forward would be controlling costs. Eyeballing growth from a sector-level, the US media industry has been relatively flat in terms of earnings growth over the previous few years. This means that whatever recent headwind the industry is enduring, it’s hitting Cinedigm harder than its peers.
What does this mean?
Though Cinedigm’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Cinedigm may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Cinedigm to get a better picture of the stock by looking at:
1. Financial Health: Is CIDM’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.
2. Valuation: What is CIDM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CIDM is currently mispriced by the market.