For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Anteo Diagnostics Limited’s (ASX:ADO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Anteo Diagnostics
Did ADO perform worse than its track record and industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 technique enables me to examine various companies in a uniform manner using the most relevant data points. For Anteo Diagnostics, its most recent bottom-line (trailing twelve month) is -€4.8M, which compared to the previous year’s figure, has become more negative. Since these figures are relatively nearsighted, I have computed an annualized five-year figure for Anteo Diagnostics’s net income, which stands at -€2.5M. 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 Anteo Diagnostics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Anteo Diagnostics’s top-line has grown by 71.62% on average, signalling that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the Australian life sciences industry has been enduring some headwinds over the past few years, leading to an average earnings drop of -25.58% in the most recent year. This means despite the fact that Anteo Diagnostics is currently running a loss, any near-term headwind the industry is experiencing, the impact on Anteo Diagnostics has been softer relative to its peers.
What does this mean?
Anteo Diagnostics’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 difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Anteo Diagnostics may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Anteo Diagnostics to get a better picture of the stock by looking at: