Does Hallmark Financial Services Inc’s (NASDAQ:HALL) -133.64% Earnings Drop Reflect A Longer Term Trend?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Hallmark Financial Services Inc’s (NASDAQ:HALL) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for Hallmark Financial Services
Despite a decline, did HALL underperform the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to examine many different companies in a uniform manner using the latest information. For Hallmark Financial Services, its most recent trailing-twelve-month earnings is -US$4.59M, which, against the prior year’s figure, has turned from positive to negative. Since these values are relatively nearsighted, I’ve computed an annualized five-year value for HALL’s earnings, which stands at US$6.57M.
We can further evaluate Hallmark Financial Services’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Hallmark Financial Services’s top-line has grown by a mere 2.68%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the US insurance industry has been growing, albeit, at a subdued single-digit rate of 9.45% in the past twelve months, and 8.42% over the last five years. This means any uplift the industry is benefiting from, Hallmark Financial Services has not been able to gain as much as its industry peers.
What does this mean?
Though Hallmark Financial Services’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 predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Hallmark Financial Services may be facing and whether management guidance has dependably been met in the past. You should continue to research Hallmark Financial Services to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Future Outlook: What are well-informed industry analysts predicting for HALL’s future growth? Take a look at this free research report of analyst consensus for HALL’s outlook.
2. Financial Health: Is HALL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 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.
