In this commentary, I will examine Comstock Holding Companies Inc’s (NASDAQ:CHCI) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the consumer durables industry performed. As an investor, I find it beneficial to assess CHCI’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. View our latest analysis for Comstock Holding Companies
How Did CHCI’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to 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 blend allows me to examine different companies in a uniform manner using the most relevant data points. For Comstock Holding Companies, its latest trailing-twelve-month earnings is -US$5.24M, which, against last year’s figure, has become less negative. Given that these values are fairly short-term thinking, I have calculated an annualized five-year figure for CHCI’s net income, which stands at -US$4.84M. This means that, Comstock Holding Companies has historically performed better than recently, while it seems like earnings are now heading back towards a more favorable position once more.
We can further evaluate Comstock Holding Companies’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Comstock Holding Companies’s top-line has increased by 15.45% on average, signalling that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the US consumer durables industry has been growing, albeit, at a subdued single-digit rate of 7.55% in the past twelve months, and a substantial 15.65% over the previous five years. This means that, while Comstock Holding Companies is presently loss-making, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
Comstock Holding Companies’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 valuable step is to examine company-specific issues Comstock Holding Companies may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Comstock Holding Companies to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is CHCI’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.