Assessing Amedica Corporation’s (NASDAQ:AMDA) 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 AMDA’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Amedica
Could AMDA beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, 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 allows me to assess many different companies in a uniform manner using the latest information. For Amedica, its most recent earnings (trailing twelve month) is -US$5.41M, which compared to the prior year’s figure, has become less negative. Given that these values may be somewhat myopic, I’ve calculated an annualized five-year figure for Amedica’s earnings, which stands at -US$23.57M. This means despite the fact that net income is negative, it has become less negative over the years.
We can further analyze Amedica’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Amedica has seen an annual decline in revenue of -9.38%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 10.69% in the previous year, and a less exciting 9.16% over the past five. This shows that, though Amedica is currently unprofitable, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Amedica’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 forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Amedica may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Amedica to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for AMDA’s future growth? Take a look at our free research report of analyst consensus for AMDA’s outlook.
- 2. Financial Health: Is AMDA’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.