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When Efore Oyj (HLSE:EFO1V) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Efore Oyj has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see EFO1V has performed. See our latest analysis for Efore Oyj
Did EFO1V’s recent earnings growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I 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 method enables me to examine different stocks on a similar basis, using the latest information. For Efore Oyj, its most recent earnings (trailing twelve month) is -€579.00K, which, in comparison to the previous year’s figure, has become less negative. Given that these values are fairly short-term, I have estimated an annualized five-year value for Efore Oyj’s earnings, which stands at -€3.29M. This shows that, while net income is negative, it has become less negative over the years.
We can further analyze Efore Oyj’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Efore Oyj’s revenue growth has been fairly soft, with an annual growth rate of -0.43%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the FI electrical industry has been growing its average earnings by double-digit 13.14% over the past year, and a less exciting 9.36% over the previous five years. This means that, while Efore Oyj is presently unprofitable, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Efore Oyj may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Efore Oyj to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for EFO1V’s future growth? Take a look at our free research report of analyst consensus for EFO1V’s outlook.
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Financial Health: Is EFO1V’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.
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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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.