Assessing LiNiu Technology Group’s (NASDAQ:LINU) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess LINU’s latest performance announced on 30 June 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for LiNiu Technology Group
Could LINU beat the long-term trend and outperform its industry?
I look at 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 method allows me to assess various companies on a more comparable basis, using the most relevant data points. For LiNiu Technology Group, its latest earnings is -$91.4M, which, against last year’s level, has become less negative. Given that these figures are somewhat short-term thinking, I’ve created an annualized five-year value for LINU’s net income, which stands at -$12.7M. This shows that, LiNiu Technology Group has historically performed better than recently, although it seems like earnings are now heading back towards to right direction again.
Additionally, we can assess LiNiu Technology Group’s loss by looking at 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 the past few years has been negative at -16.83%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Scanning growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 13.57% in the past twelve months, and 10.94% over the past five years. This suggests that, although LiNiu Technology Group is currently loss-making, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
LiNiu Technology 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 envisage what will happen in the future and when. The most insightful step is to examine company-specific issues LiNiu Technology Group may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research LiNiu Technology Group to get a better picture of the stock by looking at:
1. Financial Health: Is LINU’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.