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Assessing VivoPower International PLC’s (NASDAQ:VVPR) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess VVPR’s latest performance announced on 30 September 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for VivoPower International
Was VVPR weak performance lately part of a long-term decline?
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 companies in a uniform manner using new information. For VivoPower International, its most recent trailing-twelve-month earnings is -US$598.00K, which compared to the previous year’s level, has turned from positive to negative. Since these figures are relatively nearsighted, I have computed an annualized five-year figure for VivoPower International’s net income, which stands at US$1.45M.
We can further examine VivoPower International’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade VivoPower International’s top-line has grown by 70.16% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the US renewable energy industry has been relatively flat in terms of earnings growth over the past couple of years. This means any recent headwind the industry is facing, it’s hitting VivoPower International harder than 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 hard to envisage what will occur going forward, and when. The most insightful step is to assess company-specific issues VivoPower International may be facing and whether management guidance has regularly been met in the past. You should continue to research VivoPower International to get a more holistic view of the stock by looking at:
1. Financial Health: Is VVPR’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. 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 30 September 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.