Should You Be Content With Syros Pharmaceuticals Inc’s (SYRS) 71.5% Earnings Growth?
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Syros Pharmaceuticals Inc (NASDAQ:SYRS) useful as an attempt to give more color around how Syros Pharmaceuticals is currently performing. See our latest analysis for SYRS
Could SYRS beat the long-term trend and outperform its industry?
I use data from the most recent 12 months, 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 method enables me to analyze many different companies in a uniform manner using new information. Syros Pharmaceuticals’s latest earnings -$49.7M, which, against the previous year’s level, has become less negative. Given that these figures are fairly short-term thinking, I have computed an annualized five-year value for Syros Pharmaceuticals’s net income, which stands at -$39.1M. This means that, Syros Pharmaceuticals has historically performed better than recently, though it seems like earnings are now heading back in the right direction again.
We can further examine Syros Pharmaceuticals’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last couple of years has more than doubled, implying that Syros Pharmaceuticals is in a high-growth phase with expenses shooting ahead of high top-line growth rates. Eyeballing growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the past year, and 20.18% over the past five years. This shows that any tailwind the industry is deriving benefit from, Syros Pharmaceuticals has not been able to gain 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 difficult to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues Syros Pharmaceuticals may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Syros Pharmaceuticals to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SYRS’s future growth? Take a look at our free research report of analyst consensus for SYRS’s outlook.
2. Financial Health: Is SYRS’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.
