Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Concord Medical Services Holdings Limited’s (NYSE:CCM) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Concord Medical Services Holdings
How Well Did CCM Perform?
I like to use the ‘latest twelve-month’ data, 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 enables me to examine different companies on a more comparable basis, using the latest information. For Concord Medical Services Holdings, its most recent earnings (trailing twelve month) is -CN¥284.32M, which, against last year’s figure, has become more negative. Given that these figures may be fairly myopic, I have estimated an annualized five-year figure for Concord Medical Services Holdings’s earnings, which stands at -CN¥56.68M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further evaluate Concord Medical Services Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Concord Medical Services Holdings has seen an annual decline in revenue of -3.51%, 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 healthcare industry has been growing, albeit, at a muted single-digit rate of 9.96% over the past twelve months, and a substantial 10.53% over the past five years. This means whatever tailwind the industry is benefiting from, Concord Medical Services Holdings has not been able to leverage it as much as its industry peers.
What does this mean?
Concord Medical Services Holdings’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 difficult to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Concord Medical Services Holdings may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Concord Medical Services Holdings to get a better picture of the stock by looking at:
- Financial Health: Is CCM’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 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.