Should You Be Concerned With Endocyte Inc’s (NASDAQ:ECYT) -15.38% Earnings Drop?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Endocyte Inc’s (NASDAQ:ECYT) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for Endocyte
Did ECYT perform worse than its track record and industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 analyze different stocks on a more comparable basis, using the most relevant data points. For Endocyte, its latest trailing-twelve-month earnings is -US$52.18M, which compared to the prior year’s figure, has become more negative. Since these values may be somewhat nearsighted, I’ve determined an annualized five-year value for ECYT’s net income, which stands at -US$29.14M. This doesn’t look much better, as earnings seem to have gradually been getting more and more negative over time.
We can further assess Endocyte’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Endocyte has seen an annual decline in revenue of -26.85%, 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 pharmaceuticals industry has been growing its average earnings by double-digit 12.34% over the past year, and a more muted 9.52% over the past five. This means that any tailwind the industry is profiting from, Endocyte has not been able to leverage it as much as its industry peers.
What does this mean?
Though Endocyte’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues Endocyte may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Endocyte to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ECYT’s future growth? Take a look at our free research report of analyst consensus for ECYT’s outlook.
Financial Health: Is ECYT’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 March 2018. 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.
