Measuring Torstar Corporation’s (TSX:TS.B) 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 TS.B’s recent performance announced on 30 September 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Torstar
Did TS.B beat its long-term earnings growth trend and its 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 enables me to assess different stocks on a similar basis, using the most relevant data points. Torstar’s most recent earnings -CA$37.5M, which, against the previous year’s level, has become less negative. Given that these values are relatively myopic, I’ve determined an annualized five-year value for TS.B’s net income, which stands at -CA$17.8M. This shows that, Torstar has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards a more favorable position once more.
We can further assess Torstar’s loss by looking at what’s going on in the industry on top of within the company. Firstly, I want to quickly look into the line items. Revenue growth over last couple of years has been negative at -15.03%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting growth from a sector-level, the Canadian media industry has been enduring severe headwinds over the last couple of years, leading to an average earnings drop of -54.44% in the most recent year. This suggests that whatever recent headwind the industry is experiencing, Torstar is less exposed compared to 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 difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Torstar may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Torstar to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TS.B’s future growth? Take a look at our free research report of analyst consensus for TS.B’s outlook.