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How Does Aviragen Therapeutics Inc’s (NASDAQ:VXRT) Earnings Growth Stack Up Against Industry Performance?

After looking at Aviragen Therapeutics Inc’s (NASDAQ:VXRT) latest earnings update (31 December 2017), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. Check out our latest analysis for Aviragen Therapeutics

How Well Did VXRT Perform?

I look at the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to examine different stocks on a more comparable basis, using new information. For Aviragen Therapeutics, its most recent bottom-line (trailing twelve month) is -US$19.00M, which, relative to the prior year’s figure, has become less negative. Given that these figures are somewhat short-term, I have computed an annualized five-year value for VXRT’s net income, which stands at -US$19.51M. This shows that, although net income is negative, it has become less negative over the years.

NasdaqCM:VXRT Income Statement Feb 23rd 18
NasdaqCM:VXRT Income Statement Feb 23rd 18

We can further evaluate Aviragen Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Aviragen Therapeutics has seen an annual decline in revenue of -7.09%, 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 biotechs industry has been growing its average earnings by double-digit 12.72% in the prior year, and 19.21% over the past half a decade. This means that, although Aviragen Therapeutics is presently running a loss, it may have benefited from industry tailwinds, moving earnings towards to 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 difficult to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues Aviragen Therapeutics may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Aviragen Therapeutics to get a more holistic view of the stock by looking at:

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

  • 2. Financial Health: Is VXRT’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 31 December 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.

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