Analyzing Coziron Resources Limited’s (ASX:CZR) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess CZR’s recent performance announced on 30 June 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Coziron Resources
Commentary On CZR’s Past Performance
To account for any quarterly or half-yearly updates, 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 blend allows me to assess various companies on a more comparable basis, using the latest information. For Coziron Resources, its most recent earnings is -A$2.0M, which, in comparison to the prior year’s figure, has become less negative. Given that these figures are somewhat myopic, I have created an annualized five-year figure for CZR’s earnings, which stands at -A$2.4M. This shows that, while net income is negative, it has become less negative over the years.
Additionally, we can evaluate Coziron Resources’s loss by looking at what has been happening in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the last couple of years has been negative at -21.47%. The key to profitability here is to make sure the company’s cost growth is well-managed. Viewing growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 7.36% in the previous twelve months, and 8.50% over the previous few years. This means despite the fact that Coziron Resources is presently unprofitable, it may have benefited from 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. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Coziron Resources may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Coziron Resources to get a more holistic view of the stock by looking at:
1. Financial Health: Is CZR’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.