Measuring Medicrea’s (ENXTPA:ALMED) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ALMED’s recent performance announced on 31 December 2017 and weigh these figures against its long-term trend and industry movements. View our latest analysis for Medicrea
Despite a decline, did ALMED underperform the long-term trend and the industry?
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 enables me to analyze many different companies on a similar basis, using the most relevant data points. For Medicrea, its most recent earnings (trailing twelve month) is -€10.70M, which, against the previous year’s level, has become more negative. Given that these figures may be relatively nearsighted, I’ve calculated an annualized five-year value for ALMED’s earnings, which stands at -€2.99M. 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 evaluate Medicrea’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Medicrea’s top-line has increased by a mere 7.24%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the FR medical equipment industry has been growing its average earnings by double-digit 46.35% over the previous year, and 18.29% over the past five. This suggests that whatever uplift the industry is deriving benefit from, Medicrea has not been able to gain as much as its industry peers.
What does this mean?
Medicrea’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues Medicrea may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Medicrea to get a better picture of the stock by looking at:
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Financial Health: Is ALMED’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.