Analyzing WPX Energy Inc’s (NYSE:WPX) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess WPX’s recent performance announced on 31 March 2018 and compare these figures to its long-term trend and industry movements. See our latest analysis for WPX Energy
Commentary On WPX’s Past Performance
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess different stocks in a uniform manner using the latest information. For WPX Energy, its most recent earnings (trailing twelve month) is -US$147.00M, which, against the prior year’s figure, has become less negative. Given that these figures are somewhat short-term thinking, I have determined an annualized five-year value for WPX’s net income, which stands at -US$307.71M. This means that, even though net income is negative, it has become less negative over the years.
We can further assess WPX Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years WPX Energy has seen an annual decline in revenue of -21.85%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 25.00% over the prior year, . This is a change from a volatile drop of -5.08% in the last few years. This suggests that, although WPX Energy is presently unprofitable, it may have only just gained from the recent industry expansion, moving earnings in the right direction.
What does this mean?
WPX Energy’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues WPX Energy may be facing and whether management guidance has dependably been met in the past. You should continue to research WPX Energy to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for WPX’s future growth? Take a look at our free research report of analyst consensus for WPX’s outlook.
- Financial Health: Is WPX’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.