Investors with a long-term horizong may find it valuable to assess Frontier Services Group Limited’s (SEHK:500) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Frontier Services Group is currently performing. See our latest analysis for Frontier Services Group
How Well Did 500 Perform?
I use the ‘latest twelve-month’ data, 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 assess different stocks in a uniform manner using the most relevant data points. For Frontier Services Group, its most recent bottom-line is -HK$188.1M, which, against the prior year’s level, has become less negative. Given that these figures may be relatively myopic, I have estimated an annualized five-year value for Frontier Services Group’s net income, which stands at -HK$108.9M. This means Frontier Services Group has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.
Additionally, we can assess Frontier Services Group’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last few years has risen by 12.70%, implying that Frontier Services Group is in a high-growth period with expenses racing ahead high top-line growth rates, leading to yearly losses. Inspecting growth from a sector-level, the HK air freight and logistics industry has been enduring some headwinds over the last couple of years, leading to an average earnings drop of -22.19% in the most recent year. This means though Frontier Services Group is currently running a loss, any recent headwind the industry is enduring, Frontier Services Group is less exposed compared to its peers.
What does this mean?
Frontier Services Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Frontier Services Group may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Frontier Services Group to get a better picture of the stock by looking at: