Examining how Ominto Inc (NASDAQ:OMNT) 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 Ominto is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its internet industry peers. View our latest analysis for Ominto
Could OMNT beat the long-term trend and outperform its industry?
For the most up-to-date info, I 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 blend allows me to examine many different companies on a more comparable basis, using the most relevant data points. For Ominto, its most recent bottom-line (trailing twelve month) is -US$11.52M, which compared to the prior year’s figure, has become less negative. Since these values may be somewhat myopic, I have calculated an annualized five-year value for OMNT’s earnings, which stands at -US$8.01M. This suggests that, Ominto has historically performed better than recently, although it seems like earnings are now heading back in the right direction again.
We can further assess Ominto’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Ominto’s top-line has risen by 17.84% on average, signalling that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 26.70% in the past year, and 18.27% over the last five years. This shows that whatever tailwind the industry is benefiting from, Ominto has not been able to gain as much as its average peer.
What does this mean?
Ominto’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most valuable step is to assess company-specific issues Ominto may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Ominto to get a better picture of the stock by looking at:
- Financial Health: Is OMNT’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.
- Valuation: What is OMNT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether OMNT is currently mispriced by the market.
- 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 30 June 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.