Does Endeavour Silver Corp’s (TSE:EDR) 147.67% Earnings Growth Make It An Outperformer?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Endeavour Silver Corp’s (TSX:EDR) 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. See our latest analysis for Endeavour Silver
How Well Did EDR Perform?
I look at the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique enables me to examine various companies on a more comparable basis, using new information. For Endeavour Silver, its latest trailing-twelve-month earnings is US$9.68M, which, in comparison to last year’s level, has increased by over 100%. Since these values are somewhat nearsighted, I have estimated an annualized five-year figure for EDR’s earnings, which stands at -US$37.29M This suggests that, generally, Endeavour Silver has been able to increasingly raise its net income over the last couple of years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is merely because of industry tailwinds, or if Endeavour Silver has seen some company-specific growth. Though both top-line and bottom-line growth rates in the last couple of years, were, on average, negative, earnings were more so. While this has caused a margin contraction, it has softened Endeavour Silver’s earnings contraction. Viewing growth from a sector-level, the Canadian metals and mining industry has been growing its average earnings by double-digit 24.81% over the previous year, and 17.26% over the past five years. This means any uplift the industry is deriving benefit from, Endeavour Silver is able to amplify this to its advantage.
What does this mean?
Though Endeavour Silver’s past data is helpful, it is only one aspect of my investment thesis. While Endeavour Silver has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Endeavour Silver to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for EDR’s future growth? Take a look at our free research report of analyst consensus for EDR’s outlook.
2. Financial Health: Is EDR’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.
