Examining 1ST Group Limited’s (ASX:1ST) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 1ST’s latest performance announced on 30 June 2017 and weight these figures against its longer term trend and industry movements. View our latest analysis for 1ST Group
How Did 1ST’s Recent Performance Stack Up Against Its Past?
I prefer to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine many different companies on a more comparable basis, using the latest information. 1ST Group’s latest earnings -A$5.1M, which, against the prior year’s figure, has become more negative. Given that these values may be fairly myopic, I have determined an annualized five-year value for 1ST Group’s net income, which stands at -A$3.6M. This doesn’t seem to paint a better picture, as earnings seem to have steadily been getting more and more negative over time.
We can further assess 1ST Group’s loss by looking at what has been happening in the industry along with within the company. Initially, I want to quickly look into the line items. Revenue growth over past couple of years has grew by 43.70%, indicating that 1ST Group is in a high-growth phase with expenses shooting ahead of high top-line growth rates. Scanning growth from a sector-level, the Australian health care technology industry has been growing growth, more than doubling average earnings in the past year, and a strong 41.10% over the past five. This means any uplift the industry is deriving benefit from, 1ST Group has not been able to realize the gains unlike its average peer.
What does this mean?
1ST 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 difficult to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues 1ST Group may be facing and whether management guidance has regularly been met in the past. You should continue to research 1ST Group to get a better picture of the stock by looking at:
1. Financial Health: Is 1ST’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.