Examining how Jayex Healthcare Limited (ASX:JHL) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Jayex Healthcare is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its healthcare services industry peers. See our latest analysis for Jayex Healthcare
Commentary On JHL’s Past Performance
I prefer to 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 enables me to examine different companies on a more comparable basis, using the most relevant data points. For Jayex Healthcare, its latest earnings (trailing twelve month) is -AU$2.50M, which, in comparison to last year’s level, has become less negative. Since these values are somewhat short-term, I’ve determined an annualized five-year figure for JHL’s earnings, which stands at -AU$3.31M. This means that, although net income is negative, it has become less negative over the years.
We can further examine Jayex Healthcare’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Jayex Healthcare’s top-line has grown by 49.47% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the Australian healthcare services industry has been growing its average earnings by double-digit 15.66% over the previous twelve months, and 46.36% over the past half a decade. This suggests that, though Jayex Healthcare is presently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Jayex Healthcare’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Jayex Healthcare may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Jayex Healthcare to get a better picture of the stock by looking at:
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Financial Health: Is JHL’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.