Today I will take a look at Eagle Ride Investment Holdings Limited’s (SEHK:901) most recent earnings update (30 June 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the capital markets industry performed. As an investor, I find it beneficial to assess 901’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Eagle Ride Investment Holdings
Commentary On 901’s Past Performance
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 method allows me to examine different stocks on a more comparable basis, using new information. For Eagle Ride Investment Holdings, the most recent twelve-month earnings -HK$98.2M, which, in comparison to the previous year’s level, has become more negative. Given that these values may be relatively short-term, I have computed an annualized five-year value for Eagle Ride Investment Holdings’s earnings, which stands at -HK$79.3M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.
We can further examine Eagle Ride Investment Holdings’s loss by researching what has been happening in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over last few years has rose by 32.95%, implying that Eagle Ride Investment Holdings is in a high-growth phase with expenses shooting ahead of high top-line growth rates. Looking at growth from a sector-level, the HK capital markets industry has been relatively flat in terms of earnings growth in the previous year, settling down from a robust 14.23% over the previous few years. This means that whatever recent headwind the industry is facing, it’s hitting Eagle Ride Investment Holdings harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Eagle Ride Investment Holdings may be facing and whether management guidance has dependably been met in the past. You should continue to research Eagle Ride Investment Holdings to get a more holistic view of the stock by looking at: