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Apyx Medical Corporation's (NASDAQ:APYX) Earnings Dropped -9.8%, How Did It Fare Against The Industry?

Simply Wall St

In this article, I will take a look at Apyx Medical Corporation's (NasdaqGS:APYX) most recent earnings update (30 June 2019) and compare these latest figures against its performance over the past few years, along with how the rest of APYX's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.

Check out our latest analysis for Apyx Medical

Did APYX perform worse than its track record and industry?

APYX is loss-making, with the most recent trailing twelve-month earnings of -US$12.8m (from 30 June 2019), which compared to last year has become more negative. Furthermore, the company's loss seem to be growing over time, with the five-year earnings average of -US$6.8m. Each year, for the past five years APYX has seen an annual decline in revenue of -9.0%, on average. This adverse movement is a driver of the company's inability to reach breakeven.

Inspecting growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 28% over the past twelve months, and 17% over the last five years. This growth is a median of profitable companies of 25 Medical Equipment companies in US including Repro Med Systems, Kewaunee Scientific and Varex Imaging. This shows that whatever tailwind the industry is enjoying, Apyx Medical has not been able to gain as much as its industry peers.

NasdaqGS:APYX Income Statement, October 24th 2019
NasdaqGS:APYX Income Statement, October 24th 2019

Even though Apyx Medical is currently unprofitable, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of US$31m) over the next year. This is a sign of good cash management.

What does this mean?

Though Apyx Medical'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 predict what will occur going forward, and when. The most useful step is to assess company-specific issues Apyx Medical may be facing and whether management guidance has steadily been met in the past. You should continue to research Apyx Medical to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for APYX’s future growth? Take a look at our free research report of analyst consensus for APYX’s outlook.

  2. Financial Health: Are APYX’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 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.