Did Kindred Healthcare Inc’s (NYSE:KND) Earnings Growth Outperform The Industry?
When Kindred Healthcare Inc’s (NYSE:KND) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Kindred Healthcare’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not KND actually performed well. Below is a quick commentary on how I see KND has performed. View our latest analysis for Kindred Healthcare
Commentary On KND’s Past Performance
I look at 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 blend allows me to analyze different stocks on a more comparable basis, using the latest information. For Kindred Healthcare, its most recent earnings (trailing twelve month) is -US$193.01M, which, against the previous year’s level, has become less negative. Given that these figures may be somewhat short-term, I have created an annualized five-year value for Kindred Healthcare’s net income, which stands at -US$143.74M. This shows that, Kindred Healthcare has historically performed better than recently, even though it seems like earnings are now heading back in the right direction again.
We can further examine Kindred Healthcare’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Kindred Healthcare’s top-line has increased by a mere 7.48%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the US healthcare industry has been growing, albeit, at a subdued single-digit rate of 8.71% in the prior year, and a substantial 10.06% over the past five. This shows that, though Kindred Healthcare is presently running a loss, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Kindred Healthcare’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Kindred Healthcare may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Kindred Healthcare to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for KND’s future growth? Take a look at our free research report of analyst consensus for KND’s outlook.
2. Financial Health: Is KND’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 September 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.
