Assessing Kandi Technologies Group Inc’s (NASDAQ:KNDI) 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 KNDI’s latest performance announced on 31 March 2018 and evaluate these figures to its historical trend and industry movements. See our latest analysis for Kandi Technologies Group
How KNDI fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze different stocks in a uniform manner using the most relevant data points. For Kandi Technologies Group, its most recent trailing-twelve-month earnings is -US$466.04K, which, relative to the previous year’s level, has become less negative. Given that these figures are relatively myopic, I have calculated an annualized five-year figure for KNDI’s net income, which stands at -US$2.60M. This means while net income is negative, it has become less negative over the years.
We can further analyze Kandi Technologies Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Kandi Technologies Group’s top-line has increased by 13.42% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the US auto components industry has been growing its average earnings by double-digit 11.81% in the prior year, and 11.36% over the past five years. This means despite the fact that Kandi Technologies Group is presently 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 forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Kandi Technologies Group may be facing and whether management guidance has consistently been met in the past. You should continue to research Kandi Technologies Group to get a more holistic view of the stock by looking at:
- Financial Health: Is KNDI’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.
- Valuation: What is KNDI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether KNDI is currently mispriced by the market.
- 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.