Examining how AirIQ Inc (TSXV:IQ) 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 AirIQ is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its internet software and services industry peers. View our latest analysis for AirIQ
How Well Did IQ Perform?
For the purpose of this commentary, I like to 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 method enables me to examine various companies on a more comparable basis, using new information. For AirIQ, the most recent bottom-line is CA$0M, which compared to last year’s figure, has fallen by -11.59%. Given that these values are relatively short-term thinking, I have created an annualized five-year value for IQ’s earnings, which stands at -CA$0M. This means though earnings growth was negative from the previous year, in the long run, AirIQ’s profits have been rising on average.
What’s enabled this growth? Let’s take a look at whether it is merely due to an industry uplift, or if AirIQ has experienced some company-specific growth. Over the last couple of years, AirIQ grew its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the Canadian internet software and services industry has been relatively flat in terms of earnings growth in the past year, evening out from a solid 18.91% over the previous five years. This suggests that whatever recent headwind the industry is experiencing, it’s hitting AirIQ harder than its peers.
What does this mean?
Though AirIQ’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research AirIQ to get a more holistic view of the stock by looking at:
1. Financial Health: Is IQ’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.
2. Valuation: What is IQ worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether IQ is currently mispriced by the market.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.