Understanding Anthera Pharmaceuticals Inc’s (NASDAQ:ANTH) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Anthera Pharmaceuticals is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for Anthera Pharmaceuticals
Were ANTH’s earnings stronger than its past performances and the industry?
For the purpose of this commentary, I like to 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 allows me to analyze various companies in a uniform manner using new information. For Anthera Pharmaceuticals, its latest earnings (trailing twelve month) is -US$29.38M, which, in comparison to last year’s figure, has become less negative. Given that these values may be relatively myopic, I have determined an annualized five-year figure for ANTH’s net income, which stands at -US$48.39M. This suggests that, although net income is negative, it has become less negative over the years.
We can further examine Anthera Pharmaceuticals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Anthera Pharmaceuticals has seen an annual decline in revenue of -42.71%, 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 biotechs industry has been growing its average earnings by double-digit 24.94% in the past year, and 19.88% over the past five years. This shows that, although Anthera Pharmaceuticals is currently loss-making, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Anthera Pharmaceuticals may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Anthera Pharmaceuticals to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for ANTH’s future growth? Take a look at our free research report of analyst consensus for ANTH’s outlook.
- 2. Financial Health: Is ANTH’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.