Understanding Fieratex SA.’s (ATSE:FIER) 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 Fieratex 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 Fieratex
Did FIER’s recent earnings growth beat the long-term trend and the industry?
I prefer to use data from the most recent 12 months, 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 blend enables me to examine different stocks on a similar basis, using new information. For Fieratex, its most recent earnings (trailing twelve month) is -€798.00K, which, relative to the prior year’s figure, has become less negative. Given that these figures may be relatively short-term thinking, I’ve created an annualized five-year figure for Fieratex’s net income, which stands at -€1.83M. This shows that, while net income is negative, it has become less negative over the years.
We can further examine Fieratex’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Fieratex’s top-line has risen by a mere 4.80%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the GR luxury industry has been growing its average earnings by double-digit 38.69% over the prior twelve months, and 17.54% over the past half a decade. This suggests that, despite the fact that Fieratex is presently unprofitable, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Fieratex’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most valuable step is to assess company-specific issues Fieratex may be facing and whether management guidance has regularly been met in the past. You should continue to research Fieratex to get a better picture of the stock by looking at:
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Financial Health: Is FIER’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 30 June 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.