Assessing QAD Inc’s (NASDAQ:QADA) 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 QADA’s recent performance announced on 30 April 2018 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for QAD
Could QADA beat the long-term trend and outperform its industry?
For the most up-to-date info, 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 enables me to assess different companies in a uniform manner using the latest information. For QAD, its most recent trailing-twelve-month earnings is -US$5.10M, which, relative to last year’s level, has become less negative. Given that these values may be relatively short-term, I’ve estimated an annualized five-year value for QAD’s net income, which stands at US$3.61M.
We can further analyze QAD’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade QAD’s top-line has risen by a mere 3.22%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the US software industry has been growing its average earnings by double-digit 13.27% in the past twelve months, and 12.73% over the past half a decade. This means while QAD is currently loss-making, it may have gained from industry tailwinds, moving earnings in the right direction.
What does this mean?
While past data is useful, it 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 useful step is to assess company-specific issues QAD may be facing and whether management guidance has dependably been met in the past. You should continue to research QAD to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for QADA’s future growth? Take a look at our free research report of analyst consensus for QADA’s outlook.
- Financial Health: Is QADA’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 30 April 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.