When Inseego Corp (NASDAQ:INSG) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Inseego performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see INSG has performed. View our latest analysis for Inseego
How Well Did INSG Perform?
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 enables me to examine different stocks on a more comparable basis, using the most relevant data points. For Inseego, its latest trailing-twelve-month earnings is -US$45.73M, which, relative to the prior year’s level, has become less negative. Since these figures may be relatively short-term, I have determined an annualized five-year figure for INSG’s net income, which stands at -US$50.34M. This means though net income is negative, it has become less negative over the years.
We can further analyze Inseego’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Inseego has seen an annual decline in revenue of -11.81%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US communications industry has been relatively flat in terms of earnings growth over the last few years. This means even though Inseego is currently running a loss, whatever near-term headwind the industry is enduring, the impact on Inseego has been softer relative to its peers.
What does this mean?
Inseego’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 occur going forward, and when. The most valuable step is to assess company-specific issues Inseego may be facing and whether management guidance has regularly been met in the past. You should continue to research Inseego to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for INSG’s future growth? Take a look at our free research report of analyst consensus for INSG’s outlook.
- 2. Financial Health: Is INSG’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 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.