With A -144.16% Earnings Drop, Did Clearside BioMedical Inc (NASDAQ:CLSD) Really Underperform?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Clearside BioMedical Inc’s (NASDAQ:CLSD) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Clearside BioMedical
How Well Did CLSD Perform?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine various companies in a uniform manner using the most relevant data points. For Clearside BioMedical, its most recent earnings (trailing twelve month) is -US$52.17M, which, in comparison to the prior year’s figure, has become more negative. Since these figures may be fairly myopic, I have determined an annualized five-year figure for CLSD’s net income, which stands at -US$18.52M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further assess Clearside BioMedical’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Clearside BioMedical has seen an annual decline in revenue of -73.78%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US pharmaceuticals industry has been growing its average earnings by double-digit 10.54% in the prior year, and a less exciting 9.75% over the previous five years. This means any uplift the industry is benefiting from, Clearside BioMedical has not been able to leverage it as much as its industry peers.
What does this mean?
Though Clearside BioMedical’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 examine company-specific issues Clearside BioMedical may be facing and whether management guidance has regularly been met in the past. You should continue to research Clearside BioMedical to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CLSD’s future growth? Take a look at our free research report of analyst consensus for CLSD’s outlook.
2. Financial Health: Is CLSD’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.
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 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.
