Measuring Cardiome Pharma Corp’s (TSX:COM) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess COM’s recent performance announced on 31 December 2017 and weigh these figures against its long-term trend and industry movements. View our latest analysis for Cardiome Pharma
Was COM’s weak performance lately a part of a long-term decline?
I use data from the most recent 12 months, 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 allows me to assess different companies on a more comparable basis, using new information. For Cardiome Pharma, its latest earnings (trailing twelve month) is -US$29.81M, which, against last year’s figure, has become more negative. Since these figures may be somewhat short-term, I have computed an annualized five-year value for Cardiome Pharma’s net income, which stands at -US$17.49M. This doesn’t look much better, as earnings seem to have gradually been getting more and more negative over time.
We can further analyze Cardiome Pharma’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Cardiome Pharma’s top-line has grown by 25.21% on average, signalling that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the Canadian pharmaceuticals industry has been ramping up average earnings growth of 87.77% over the past year, and a solid 27.50% over the past half a decade. This shows that any uplift the industry is benefiting from, Cardiome Pharma has not been able to gain 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 hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Cardiome Pharma may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Cardiome Pharma to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for COM’s future growth? Take a look at our free research report of analyst consensus for COM’s outlook.
- Financial Health: Is COM’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 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.