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Examining how MolMed Sp.A. (BIT:MLM) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how MolMed is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechs industry peers. View our latest analysis for MolMed
Did MLM beat its long-term earnings growth trend and its industry?
I 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 technique allows me to analyze various companies in a uniform manner using new information. For MolMed, its most recent bottom-line (trailing twelve month) is -€8.50M, which, in comparison to the prior year’s figure, has become less negative. Given that these figures may be somewhat myopic, I’ve determined an annualized five-year figure for MolMed’s net income, which stands at -€17.52M. This suggests that, even though net income is negative, it has become less negative over the years.
We can further analyze MolMed’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years MolMed’s top-line has increased by 31.21% on average, indicating that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the IT biotechs industry has been growing its average earnings by double-digit 22.08% in the past twelve months, and 17.54% over the last five years. This shows that, while MolMed is currently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Though MolMed’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues MolMed may be facing and whether management guidance has dependably been met in the past. You should continue to research MolMed to get a better picture of the stock by looking at:
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Financial Health: Is MLM’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.