For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Celgene Corporation (NASDAQ:CELG) useful as an attempt to give more color around how Celgene is currently performing. View our latest analysis for Celgene
How Did CELG’s Recent Performance Stack Up Against Its Past?
I use 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 technique allows me to analyze different companies on a more comparable basis, using the latest information. For Celgene, its most recent bottom-line (trailing twelve month) is US$2.85B, which, relative to the previous year’s level, has moved up by 33.99%. Since these values may be fairly nearsighted, I have estimated an annualized five-year figure for Celgene’s earnings, which stands at US$1.84B This suggests that, generally, Celgene has been able to increasingly grow its earnings over the past couple of years as well.
What’s enabled this growth? Well, let’s take a look at if it is merely owing to an industry uplift, or if Celgene has experienced some company-specific growth. The ascend in earnings seems to be supported by a substantial top-line increase outpacing its growth rate of expenses. Though this brought about a margin contraction, it has made Celgene more profitable. Looking at growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% over the previous twelve months, and 18.58% over the past half a decade. This means that any uplift the industry is profiting from, Celgene is able to amplify this to its advantage.
What does this mean?
Celgene’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Celgene gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Celgene to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CELG’s future growth? Take a look at our free research report of analyst consensus for CELG’s outlook.
- Financial Health: Is CELG’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.
- 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 March 2018. 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.