Assessing Expert System Sp.A.’s (BIT:EXSY) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess EXSY’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. View our latest analysis for Expert System
Was EXSY’s recent earnings decline indicative of a tough track record?
For the purpose of this commentary, I like 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 analyze various companies on a similar basis, using the most relevant data points. For Expert System, its latest earnings (trailing twelve month) is -€8.34M, which, against the prior year’s figure, has become more negative. Given that these values are somewhat short-term thinking, I’ve created an annualized five-year value for Expert System’s earnings, which stands at -€3.84M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.
We can further examine Expert System’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Expert System’s top-line has grown by 20.98% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the IT software industry has been relatively flat in terms of earnings growth over the past twelve months, evening out from a robust 10.81% over the previous five years. This suggests that any recent headwind the industry is experiencing, it’s hitting Expert System harder than its peers.
What does this mean?
Though Expert System’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 envisage what will occur going forward, and when. The most insightful step is to assess company-specific issues Expert System may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Expert System to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for EXSY’s future growth? Take a look at our free research report of analyst consensus for EXSY’s outlook.
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Financial Health: Is EXSY’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.