Should You Be Concerned With CBAK Energy Technology Inc’s (NASDAQ:CBAK) -68.85% Earnings Drop?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess CBAK Energy Technology Inc’s (NASDAQ:CBAK) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for CBAK Energy Technology
Commentary On CBAK’s Past Performance
For the purpose of this commentary, 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 blend allows me to assess different stocks on a more comparable basis, using the most relevant data points. For CBAK Energy Technology, its latest earnings (trailing twelve month) is -US$21.47M, which, against the previous year’s level, has become more negative. Since these figures are fairly short-term thinking, I have created an annualized five-year figure for CBAK Energy Technology’s net income, which stands at -US$35.63M. This means although net income is negative, it has become less negative over the years.
We can further evaluate CBAK Energy Technology’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years CBAK Energy Technology has seen an annual decline in revenue of -36.11%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US electronic industry has been growing its average earnings by double-digit 16.38% over the past twelve months, and 10.35% over the past five. This means any tailwind the industry is profiting from, CBAK Energy Technology has not been able to leverage it as much as its average peer.
What does this mean?
CBAK Energy Technology’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most valuable step is to examine company-specific issues CBAK Energy Technology may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research CBAK Energy Technology to get a better picture of the stock by looking at:
Financial Health: Is CBAK’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.
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.
