Assessing Nine Energy Service Inc’s (NYSE:NINE) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess NINE’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Nine Energy Service
How Did NINE’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, 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 technique enables me to examine many different companies on a more comparable basis, using new information. For Nine Energy Service, its most recent trailing-twelve-month earnings is -US$67.68M, which, against the previous year’s level, has become less negative. Given that these values may be somewhat nearsighted, I have determined an annualized five-year value for NINE’s earnings, which stands at -US$64.98M. This suggests that, Nine Energy Service has historically performed better than recently, despite the fact that it seems like earnings are now heading back in the right direction again.
We can further examine Nine Energy Service’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Nine Energy Service’s top-line has grown by a mere 6.98%, 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 energy services industry has been growing its average earnings by double-digit 26.78% in the previous year, . This is a change from a volatile drop of -19.81% in the past few years. This suggests that whatever uplift the industry is benefiting from, Nine Energy Service has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Nine Energy Service may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Nine Energy Service to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for NINE’s future growth? Take a look at our free research report of analyst consensus for NINE’s outlook.
- 2. Financial Health: Is NINE’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.