With A -130.99% Earnings Drop, Did Mesa Laboratories Inc (NASDAQ:MLAB) Really Underperform?
When Mesa Laboratories Inc (NASDAQ:MLAB) released its most recent earnings update (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Mesa Laboratories’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not MLAB actually performed well. Below is a quick commentary on how I see MLAB has performed. See our latest analysis for Mesa Laboratories
Commentary On MLAB’s Past Performance
I prefer to use the ‘latest twelve-month’ data, 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 blend allows me to analyze various companies on a more comparable basis, using the latest information. For Mesa Laboratories, its most recent bottom-line (trailing twelve month) is -US$3.57M, which, in comparison to the prior year’s level, has turned from positive to negative. Given that these figures are relatively short-term thinking, I have determined an annualized five-year figure for MLAB’s net income, which stands at US$8.81M.
We can further examine Mesa Laboratories’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Mesa Laboratories’s top-line has grown by 16.37% on average, signalling that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the US electronic industry has been growing its average earnings by double-digit 16.53% in the previous twelve months, and 10.17% over the past five years. This suggests that any uplift the industry is deriving benefit from, Mesa Laboratories has not been able to gain as much as its industry peers.
What does this mean?
Mesa Laboratories’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 predict what will occur going forward, and when. The most useful step is to examine company-specific issues Mesa Laboratories may be facing and whether management guidance has consistently been met in the past. You should continue to research Mesa Laboratories to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MLAB’s future growth? Take a look at our free research report of analyst consensus for MLAB’s outlook.
Financial Health: Is MLAB’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.
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.
