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Was Champions Oncology Inc’s (CSBR) Earnings Growth Better Than Industry?

Bernadette Hatcher

Analyzing Champions Oncology Inc’s (NASDAQ:CSBR) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess CSBR’s recent performance announced on 31 July 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Champions Oncology

Were CSBR’s earnings stronger than its past performances and the industry?

I like 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 allows me to analyze different stocks on a similar basis, using the most relevant data points. Champions Oncology’s latest twelve-month earnings -$5.0M, which compared to the prior year’s level, has become less negative. Given that these values are somewhat nearsighted, I’ve created an annualized five-year figure for Champions Oncology’s net income, which stands at -$8.2M. This shows that, despite the fact that net income is negative, it has become less negative over the years.

NasdaqCM:CSBR Income Statement Dec 7th 17
NasdaqCM:CSBR Income Statement Dec 7th 17

We can further analyze Champions Oncology’s loss by looking at what’s going on in the industry along with within the company. First, I want to briefly look into the line items. Revenue growth over past couple of years has grew by 12.22%, signalling that Champions Oncology is in a high-growth phase with expenses racing ahead high top-line growth rates. Inspecting growth from a sector-level, the US life sciences tools and services industry has been growing its average earnings by double-digit 10.54% in the previous year, and 16.45% over the past five. This means that, despite the fact that Champions Oncology is currently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.

What does this mean?

Though Champions Oncology’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will happen in the future and when. The most insightful step is to assess company-specific issues Champions Oncology may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Champions Oncology to get a more holistic view of the stock by looking at:

1. Financial Health: Is CSBR’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.