Assessing ChinaCache International Holdings Ltd’s (NASDAQ:CCIH) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess CCIH’s recent performance announced on 30 June 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for ChinaCache International Holdings
Was CCIH’s weak performance lately a part of a long-term decline?
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 allows me to analyze various companies in a uniform manner using new information. For ChinaCache International Holdings, its latest earnings (trailing twelve month) is -CN¥791.8M, which, relative to the prior year’s level, has become more negative. Given that these values are somewhat short-term, I have determined an annualized five-year value for CCIH’s net income, which stands at -CN¥153.1M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further evaluate ChinaCache International Holdings’s loss by looking at 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 past couple of years has risen by 11.47%, indicating that ChinaCache International Holdings 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 internet industry has been growing, albeit, at a unexciting single-digit rate of 7.42% over the prior twelve months, and a substantial 15.52% over the past five. This means any tailwind the industry is profiting from, ChinaCache International Holdings has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues ChinaCache International Holdings may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research ChinaCache International Holdings to get a more holistic view of the stock by looking at:
1. Financial Health: Is CCIH’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 June 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.