Does eMagin Corporation’s (NYSEMKT:EMAN) Earnings Growth Make It An Outperformer?
In this article, I will take a look at eMagin Corporation’s (AMEX:EMAN) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of EMAN’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for eMagin
How Well Did EMAN Perform?
To account for any quarterly or half-yearly updates, 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 blend enables me to examine many different companies on a similar basis, using new information. For eMagin, its latest earnings (trailing twelve month) is -US$7.78M, which, in comparison to the prior year’s figure, has become less negative. Since these figures may be fairly myopic, I’ve estimated an annualized five-year figure for EMAN’s earnings, which stands at -US$4.14M. This means that, eMagin has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards to right direction again.
We can further evaluate eMagin’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years eMagin has seen an annual decline in revenue of -6.23%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US electronic industry has been growing its average earnings by double-digit 15.75% in the prior year, and 10.82% over the past five. This means that whatever uplift the industry is enjoying, eMagin has not been able to gain as much as its average peer.
What does this mean?
Though eMagin’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues eMagin may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research eMagin to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for EMAN’s future growth? Take a look at our free research report of analyst consensus for EMAN’s outlook.
2. Financial Health: Is EMAN’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.
