Assessing Archos SA.’s (ENXTPA:JXR) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess JXR’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Archos
Despite a decline, did JXR underperform the long-term trend and the industry?
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 method allows me to assess various companies on a more comparable basis, using the latest information. For Archos, its latest trailing-twelve-month earnings is -€6.75M, which, against last year’s level, has become more negative. Since these figures are somewhat myopic, I’ve calculated an annualized five-year value for Archos’s earnings, which stands at -€8.28M. This suggests that, although net income is negative, it has become less negative over the years.
We can further evaluate Archos’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Archos’s revenue growth has been somewhat muted, with an annual growth rate of -1.82%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the FR tech industry has been growing its average earnings by double-digit 16.80% over the prior twelve months, and 14.83% over the previous five years. This suggests that any tailwind the industry is enjoying, Archos has not been able to reap as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Archos may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Archos to get a better picture of the stock by looking at:
- Financial Health: Is JXR’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.
- Valuation: What is JXR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether JXR is currently mispriced by the market.
- 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.