Investors with a long-term horizong may find it valuable to assess China Biologic Products Holdings Inc’s (NASDAQ:CBPO) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how China Biologic Products Holdings is currently performing. View our latest analysis for China Biologic Products Holdings
Did CBPO’s recent earnings growth beat the long-term trend and the industry?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to examine different stocks on a more comparable basis, using new information. For China Biologic Products Holdings, its most recent trailing-twelve-month earnings is $109.0M, which, in comparison to last year’s figure, has moved up by 10.26%. Since these figures may be relatively myopic, I have calculated an annualized five-year value for CBPO’s earnings, which stands at $63.2M. This suggests that, on average, China Biologic Products Holdings has been able to consistently grow its bottom line over the last few years as well.
How has it been able to do this? Well, let’s take a look at if it is solely attributable to industry tailwinds, or if China Biologic Products Holdings has experienced some company-specific growth. In the past few years, China Biologic Products Holdings expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the past twelve months, and 20.18% over the previous five years. This means whatever tailwind the industry is deriving benefit from, China Biologic Products Holdings has not been able to leverage it as much as its industry peers.
What does this mean?
Though China Biologic Products Holdings’s past data is helpful, it is only one aspect of my investment thesis. While China Biologic Products Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research China Biologic Products Holdings to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CBPO’s future growth? Take a look at our free research report of analyst consensus for CBPO’s outlook.
2. Financial Health: Is CBPO’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 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.