Measuring Biomerica Inc’s (NASDAQ:BMRA) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BMRA’s recent performance announced on 31 August 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Biomerica
How BMRA fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 allows me to assess different stocks on a more comparable basis, using the most relevant data points. For Biomerica, its latest twelve-month earnings is -$1.1M, which compared to last year’s figure, has become less negative. Since these values are fairly myopic, I have determined an annualized five-year figure for BMRA’s earnings, which stands at -$0.2M. This shows that, Biomerica has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.
Additionally, we can evaluate Biomerica’s loss by looking at what has been happening in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past couple of years has been fairly subdued, remaining flat on average at -0.68%. Given that top-line growth is also pretty stale the key to profitability moving forward would be controlling cost growth rates. Looking at growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 18.95% over the previous year, and a more subdued 9.07% over the previous five years. This means though Biomerica is presently running a loss, it may have been aided by 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 forecast what will occur going forward, and when. The most useful step is to assess company-specific issues Biomerica may be facing and whether management guidance has dependably been met in the past. You should continue to research Biomerica to get a better picture of the stock by looking at:
1. Financial Health: Is BMRA’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.
2. 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.