For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Loral Space & Communications Inc (NASDAQ:LORL) useful as an attempt to give more color around how Loralce & Communications is currently performing. Check out our latest analysis for Loralce & Communications
How Did LORL’s Recent Performance Stack Up Against Its Past?
I like to 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 many different companies on a more comparable basis, using the latest information. For Loralce & Communications, its most recent bottom-line (trailing twelve month) is US$67.40M, which, in comparison to the previous year’s level, has fallen by -23.51%. Since these figures are somewhat myopic, I have created an annualized five-year value for LORL’s earnings, which stands at US$66.20M This means even though earnings declined from the prior year, over the past couple of years, Loralce & Communications’s earnings have been growing on average.
How has it been able to do this? Let’s see whether it is solely owing to industry tailwinds, or if Loralce & Communications has experienced some company-specific growth. In the last few years, even though bottom-line growth has seen a decrease, top-line growth has fallen by a lot more, bringing about a margin expansion and Loralce & Communications still maintaining profitability. Scanning growth from a sector-level, the US media industry has been growing its average earnings by double-digit 26.87% over the past twelve months, and a more muted 5.80% over the past half a decade. This suggests that whatever uplift the industry is profiting from, Loralce & Communications has not been able to realize the gains unlike its industry peers.
What does this mean?
Though Loralce & Communications’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research Loralce & Communications to get a more holistic view of the stock by looking at:
- Financial Health: Is LORL’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 March 2018. 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.