Should You Be Content With OpGen Inc’s (OPGN) 56.9% Earnings Growth?
Examining OpGen Inc’s (NASDAQ:OPGN) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess OPGN’s latest performance announced on 30 September 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for OpGen
Did OPGN’s recent EPS Growth beat the long-term trend and the industry?
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to examine different stocks in a uniform manner using the latest information. OpGen’s latest earnings -$17M, which, in comparison to the previous year’s figure, has become less negative. Given that these figures may be relatively myopic, I’ve estimated an annualized five-year value for OPGN’s earnings, which stands at -$15M. This means OpGen has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards a more favorable position once more.
Additionally, we can assess OpGen’s loss by researching what’s going on in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over past couple of years has been negative at -3.82%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the US biotechnology industry has been growing, albeit, at a muted single-digit rate of 8.45% in the prior twelve months, and a substantial 22.54% over the previous five years. This means despite the fact that OpGen is currently unprofitable, it may have gained from industry tailwinds, moving earnings in the right direction.
What does this mean?
OpGen’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 difficult to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues OpGen may be facing and whether management guidance has dependably been met in the past. You should continue to research OpGen to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OPGN’s future growth? Take a look at our free research report of analyst consensus for OPGN’s outlook.
2. Financial Health: Is OPGN’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.
