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 Sirona Biochem Corp (TSXV:SBM) useful as an attempt to give more color around how Sirona Biochem is currently performing. View our latest analysis for Sirona Biochem
How Well Did SBM Perform?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze different companies on a similar basis, using the most relevant data points. For Sirona Biochem, its most recent trailing-twelve-month earnings is -CA$4.01M, which compared to last year’s figure, has become more negative. Given that these figures may be somewhat myopic, I have calculated an annualized five-year figure for Sirona Biochem’s net income, which stands at -CA$3.09M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further assess Sirona Biochem’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Sirona Biochem’s top-line has risen by 13.96% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the Canadian biotechs industry has been amplifying growth, more than doubling average earnings in the previous twelve months, and a substantial 13.36% over the last five years. This means that whatever tailwind the industry is benefiting from, Sirona Biochem has not been able to gain as much as its average peer.
What does this mean?
Though Sirona Biochem’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will happen in the future and when. The most insightful step is to examine company-specific issues Sirona Biochem may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Sirona Biochem to get a better picture of the stock by looking at:
- 1. Financial Health: Is SBM’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 31 January 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.