Today I will take a look at Celldex Therapeutics Inc’s (NASDAQ:CLDX) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the biotechs industry performed. As an investor, I find it beneficial to assess CLDX’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Celldex Therapeutics
How Well Did CLDX Perform?
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 assess different companies in a uniform manner using the latest information. For Celldex Therapeutics, its latest earnings (trailing twelve month) is -US$93.03M, which, in comparison to the prior year’s level, has become less negative. Since these values may be somewhat short-term thinking, I’ve estimated an annualized five-year value for CLDX’s earnings, which stands at -US$91.49M. This means Celldex Therapeutics has historically performed better than recently, though it seems like earnings are now heading back towards a more favorable position once more.
We can further evaluate Celldex Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Celldex Therapeutics has seen an annual decline in revenue of -2.75%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 23.61% in the previous year, and 20.00% over the past five years. This suggests that, even though Celldex Therapeutics is presently unprofitable, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Though Celldex Therapeutics’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most valuable step is to assess company-specific issues Celldex Therapeutics may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Celldex Therapeutics to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for CLDX’s future growth? Take a look at our free research report of analyst consensus for CLDX’s outlook.
- 2. Financial Health: Is CLDX’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 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.