After reading Carver Bancorp Inc’s (NASDAQ:CARV) most recent earnings announcement (30 September 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Carver Bancorp’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Carver Bancorp
How Did CARV’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, 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 technique enables me to analyze various companies in a uniform manner using the latest information. For Carver Bancorp, its most recent earnings (trailing twelve month) is -$4.1M, which, relative to the prior year’s figure, has become more negative. Since these values may be relatively short-term thinking, I’ve calculated an annualized five-year figure for CARV’s net income, which stands at -$7.9M. This means although net income is negative, it has become less negative over the years.
We can further evaluate Carver Bancorp’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over the last couple of years has risen by 13.17%, indicating that Carver Bancorp is in a high-growth phase with expenses racing ahead elevated top-line growth rates, leading to yearly losses. Inspecting growth from a sector-level, the US thrifts and mortgage finance industry has been growing its average earnings by double-digit 11.49% in the previous year, and 14.84% over the past couple of years. This suggests that any tailwind the industry is deriving benefit from, Carver Bancorp has not been able to realize the gains unlike its industry peers.
What does this mean?
Carver Bancorp’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 predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Carver Bancorp may be facing and whether management guidance has steadily been met in the past. You should continue to research Carver Bancorp to get a better picture of the stock by looking at:
1. Financial Health: Is CARV’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 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.