When Jupiter Energy Limited (ASX:JPR) released its most recent earnings update (30 June 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Jupiter Energy has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see JPR has performed. Check out our latest analysis for Jupiter Energy
How Well Did JPR Perform?
I look at 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 technique enables me to analyze various companies on a similar basis, using the most relevant data points. Jupiter Energy’s latest earnings -A$8.1M, which, in comparison to the prior year’s figure, has become less negative. Since these figures are somewhat short-term thinking, I have estimated an annualized five-year value for JPR’s earnings, which stands at -A$6.7M. This shows that, Jupiter Energy has historically performed better than recently, although it seems like earnings are now heading back towards to right direction again.
Additionally, we can examine Jupiter Energy’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 past few years has rose by 15.82%, signalling that Jupiter Energy is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the Australian oil and gas industry has been enduring some headwinds in the previous twelve months, leading to an average earnings drop of -25.18%. This is a major change, given that the industry has constantly been delivering a a solid growth of 28.17% in the previous few years. This shows that any recent headwind the industry is experiencing, Jupiter Energy is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will happen in the future and when. The most useful step is to assess company-specific issues Jupiter Energy may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Jupiter Energy to get a more holistic view of the stock by looking at: