For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Biomerica Inc (NASDAQ:BMRA) useful as an attempt to give more color around how Biomerica is currently performing. See our latest analysis for Biomerica
How Well Did BMRA Perform?
I use 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 method enables me to analyze different stocks on a similar basis, using the most relevant data points. For Biomerica, its most recent trailing-twelve-month earnings is -US$1.13M, which compared to last year’s figure, has become less negative. Given that these figures are relatively short-term thinking, I’ve calculated an annualized five-year figure for BMRA’s earnings, which stands at -US$267.57K. This means Biomerica has historically performed better than recently, though it seems like earnings are now heading back in the right direction again.
We can further assess Biomerica’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Biomerica’s revenue growth has been relatively muted, with an annual growth rate of -0.66%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 10.69% over the prior twelve months, and 10.37% over the past five years. This suggests that, though Biomerica is currently running a loss, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
Biomerica’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most useful step is to assess company-specific issues Biomerica may be facing and whether management guidance has consistently been met in the past. You should continue to research Biomerica to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BMRA’s future growth? Take a look at our free research report of analyst consensus for BMRA’s outlook.
- 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.
- 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 November 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.