Examining Tabula Rasa Healthcare Inc’s (NASDAQ:TRHC) 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 TRHC’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for Tabula Rasa Healthcare
Was TRHC’s recent earnings decline worse than the long-term trend and the industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to assess different companies on a similar basis, using the most relevant data points. For Tabula Rasa Healthcare, the latest twelve-month earnings -$1.5M, which compared to last year’s figure, has turned from positive to negative. Since these figures may be relatively short-term, I have created an annualized five-year figure for Tabula Rasa Healthcare’s earnings, which stands at -$7.5M. This shows that, even though net income is negative, it has become less negative over the years.
Additionally, we can assess Tabula Rasa Healthcare’s loss by researching what has been happening in the industry on top of within the company. Firstly, I want to quickly look into the line items. Revenue growth over the past couple of years has increased by 31.87%, signalling that Tabula Rasa Healthcare is in a high-growth period with expenses shooting ahead of high top-line growth rates. Viewing growth from a sector-level, the US healthcare services industry has been growing its average earnings by double-digit 15.49% over the past year, and 14.73% over the past five years. This suggests that any tailwind the industry is benefiting from, Tabula Rasa Healthcare has not been able to leverage it as much as its average peer.
What does this mean?
While past data is useful, it 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 insightful step is to assess company-specific issues Tabula Rasa Healthcare may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Tabula Rasa Healthcare to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TRHC’s future growth? Take a look at our free research report of analyst consensus for TRHC’s outlook.
2. Financial Health: Is TRHC’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.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.