For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine CSE Global Limited’s (SGX:544) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for CSE Global
Was 544’s weak performance lately a part of a long-term decline?
I look at 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 examine various companies on a more comparable basis, using the latest information. For CSE Global, its most recent bottom-line is -SGD1.7M, which, in comparison to the prior year’s figure, has turned from positive to negative. Given that these figures may be fairly myopic, I have estimated an annualized five-year value for CSE Global’s net income, which stands at SGD24.9M.
We can further assess CSE Global’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 past couple of years has been negative at -5.24%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the SG it services industry has been growing its average earnings by double-digit 11.12% in the past year, and 14.31% over the previous few years. This shows that whatever tailwind the industry is profiting from, CSE Global has not been able to reap as much as its industry peers.
What does this mean?
CSE Global’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues CSE Global may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research CSE Global to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 544’s future growth? Take a look at our free research report of analyst consensus for 544’s outlook.
2. Financial Health: Is 544’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.