For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Harvard Bioscience Inc (NASDAQ:HBIO) useful as an attempt to give more color around how Harvard Bioscience is currently performing. View our latest analysis for Harvard Bioscience
Did HBIO’s recent earnings growth beat the long-term trend and the industry?
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 method enables me to assess different companies in a uniform manner using the most relevant data points. For Harvard Bioscience, its latest earnings (trailing twelve month) is -US$865.00K, which compared to the prior year’s figure, has become less negative. Since these values may be somewhat short-term, I have computed an annualized five-year value for Harvard Bioscience’s net income, which stands at -US$1.34M. This means though net income is negative, it has become less negative over the years.
We can further examine Harvard Bioscience’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Harvard Bioscience’s revenue growth has been fairly unexciting, with an annual growth rate of -1.05%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the US life sciences industry has been growing its average earnings by double-digit 20.76% in the prior twelve months, and 16.75% over the past half a decade. This shows that, although Harvard Bioscience is presently unprofitable, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Harvard Bioscience may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Harvard Bioscience to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HBIO’s future growth? Take a look at our free research report of analyst consensus for HBIO’s outlook.
- Financial Health: Is HBIO’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.