Did Monster Digital Inc’s (MSDI) Recent Earnings Growth Beat The Trend?
Assessing Monster Digital Inc’s (NASDAQ:MSDI) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MSDI’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for Monster Digital
Were MSDI’s earnings stronger than its past performances and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 method enables me to examine different companies on a more comparable basis, using new information. Monster Digital’s most recent earnings -$7M, which, relative to the prior year’s figure, has become less negative. Given that these figures are fairly short-term, I’ve estimated an annualized five-year figure for MSDI’s net income, which stands at -$9M. This shows that, although net income is negative, it has become less negative over the years.
We can further analyze Monster Digital’s loss by researching what has been happening in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over last few years has been negative at -25.20%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the US technology hardware, storage and peripherals industry has been growing its average earnings by double-digit 12.55% over the previous twelve months, . This is a turnaround from a volatile drop of -2.07% in the previous few years. This means that, even though Monster Digital is presently unprofitable, it may have only just gained from the recent industry expansion, moving earnings towards to right direction.
What does this mean?
Monster Digital’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 difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Monster Digital may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Monster Digital to get a more holistic view of the stock by looking at:
1. Financial Health: Is MSDI’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
