For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Bio-Path Holdings Inc (NASDAQ:BPTH) useful as an attempt to give more color around how Bio-Path Holdings is currently performing. View our latest analysis for Bio-Path Holdings
Despite a decline, did BPTH underperform the long-term trend and the industry?
I look at 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 blend enables me to analyze different stocks in a uniform manner using the latest information. For Bio-Path Holdings, its most recent bottom-line (trailing twelve month) is -US$8.06M, which, in comparison to the prior year’s figure, has become more negative. Given that these values are fairly myopic, I have computed an annualized five-year value for Bio-Path Holdings’s earnings, which stands at -US$4.40M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.
We can further analyze Bio-Path Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Bio-Path Holdings’s top-line more than doubled on average, signalling that the business is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the US pharmaceuticals industry has been growing its average earnings by double-digit 11.56% over the prior twelve months, and a more muted 9.52% over the past half a decade. This means whatever tailwind the industry is deriving benefit from, Bio-Path Holdings has not been able to reap as much as its industry peers.
What does this mean?
Bio-Path Holdings’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 hard to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Bio-Path Holdings may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Bio-Path Holdings to get a more holistic view of the stock by looking at:
- Financial Health: Is BPTH’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.