DBV Technologies SA. (NASDAQ:DBVT): Should The Recent Earnings Drop Worry You?
Assessing DBV Technologies SA.’s (NASDAQ:DBVT) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess DBVT’s latest performance announced on 30 June 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for DBV Technologies
Did DBVT perform worse than its track record and industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess various companies on a similar basis, using the latest information. For DBV Technologies, its most recent trailing-twelve-month earnings is -€137.63M, which, relative to the prior year’s level, has become more negative. Given that these values may be somewhat short-term, I’ve computed an annualized five-year value for DBV Technologies’s net income, which stands at -€37.49M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further examine DBV Technologies’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years DBV Technologies’s top-line has increased by 25.94% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 24.94% in the prior twelve months, and 20.47% over the past half a decade. This suggests that whatever uplift the industry is enjoying, DBV Technologies has not been able to leverage it as much as its average peer.
What does this mean?
Though DBV Technologies’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most useful step is to examine company-specific issues DBV Technologies may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research DBV Technologies to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DBVT’s future growth? Take a look at our free research report of analyst consensus for DBVT’s outlook.
2. Financial Health: Is DBVT’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 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.
