Should You Be Concerned With Idera Pharmaceuticals Inc’s (NASDAQ:IDRA) -74.83% Earnings Drop?
Examining how Idera Pharmaceuticals Inc (NASDAQ:IDRA) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Idera Pharmaceuticals is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechs industry peers. See our latest analysis for Idera Pharmaceuticals
Was IDRA weak performance lately part of a long-term decline?
To account for any quarterly or half-yearly updates, 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 assess many different companies on a more comparable basis, using the latest information. For Idera Pharmaceuticals, its latest earnings (trailing twelve month) is -US$71.02M, which, in comparison to the prior year’s level, has become more negative. Given that these values may be fairly myopic, I’ve calculated an annualized five-year value for IDRA’s earnings, which stands at -US$37.19M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze Idera Pharmaceuticals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Idera Pharmaceuticals’s top-line has grown by 46.44% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Looking at growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% in the prior year, and 18.58% over the past five. This means that any uplift the industry is deriving benefit from, Idera Pharmaceuticals has not been able to realize the gains unlike its average peer.
What does this mean?
Though Idera Pharmaceuticals’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Idera Pharmaceuticals may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Idera Pharmaceuticals to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IDRA’s future growth? Take a look at our free research report of analyst consensus for IDRA’s outlook.
Financial Health: Is IDRA’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.
