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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Tenax Therapeutics Inc’s (NASDAQ:TENX) 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. View our latest analysis for Tenax Therapeutics
Was TENX weak performance lately part of a long-term decline?
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 technique allows me to analyze different companies on a similar basis, using new information. For Tenax Therapeutics, its most recent trailing-twelve-month earnings is -US$37.14M, which, in comparison to last year’s figure, has become more negative. Given that these figures are relatively nearsighted, I have determined an annualized five-year figure for Tenax Therapeutics’s earnings, which stands at -US$19.43M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further examine Tenax Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Tenax Therapeutics has seen an annual decline in revenue of -33.71%, 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 biotechs industry has been growing its average earnings by double-digit 22.22% in the previous twelve months, and 19.51% over the past five years. This shows that any uplift the industry is profiting from, Tenax Therapeutics has not been able to realize the gains unlike its industry peers.
What does this mean?
Tenax Therapeutics’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 envisage what will happen in the future and when. The most valuable step is to examine company-specific issues Tenax Therapeutics may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Tenax Therapeutics to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TENX’s future growth? Take a look at our free research report of analyst consensus for TENX’s outlook.
2. Financial Health: Is TENX’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.