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Does Advaxis Inc’s (NASDAQ:ADXS) -20.1% EPS Decline Reflect A Long-Term Trend?

Seth Doty

Today I will examine Advaxis Inc’s (NASDAQ:ADXS) latest earnings update (31 July 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of ADXS’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Advaxis

Was ADXS weak performance lately part of a long-term decline?

I 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 technique allows me to assess different companies in a uniform manner using new information. Advaxis’s latest twelve-month earnings -$91.9M, which, against the previous year’s figure, has become more negative. Given that these values may be somewhat nearsighted, I have determined an annualized five-year figure for ADXS’s earnings, which stands at -$31.5M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.

NasdaqGS:ADXS Income Statement Dec 20th 17

Additionally, we can evaluate Advaxis’s loss by looking at what has been happening in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over the last couple of years has risen by 43.00%, indicating that Advaxis is in a high-growth phase with expenses racing ahead high top-line growth rates. Viewing growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the prior twelve months, and 20.18% over the past five. This means whatever tailwind the industry is deriving benefit from, Advaxis has not been able to leverage it as much as its industry peers.

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 predict what will happen in the future and when. The most useful step is to examine company-specific issues Advaxis may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Advaxis to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for ADXS’s future growth? Take a look at our free research report of analyst consensus for ADXS’s outlook.

2. Financial Health: Is ADXS’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 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.