Does ORGANIC Farma Zdrowia SA.’s (WSE:ORG) -67.74% Earnings Drop Reflect A Longer Term Trend?
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on ORGANIC Farma Zdrowia SA. (WSE:ORG) useful as an attempt to give more color around how ORGANIC Farma Zdrowia is currently performing. View our latest analysis for ORGANIC Farma Zdrowia
Did ORG perform worse than its track record and industry?
For the most up-to-date info, I use 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 enables me to analyze different companies in a uniform manner using new information. For ORGANIC Farma Zdrowia, its most recent trailing-twelve-month earnings is -ZŁ5.08M, which, relative to the previous year’s level, has become more negative. Given that these figures may be somewhat short-term thinking, I have determined an annualized five-year figure for ORGANIC Farma Zdrowia’s net income, which stands at -ZŁ1.01M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze ORGANIC Farma Zdrowia’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years ORGANIC Farma Zdrowia’s top-line has increased by 15.78% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the PL consumer retailing industry has been growing its average earnings by double-digit 34.67% over the previous twelve months, and 11.44% over the last five years. This shows that whatever uplift the industry is profiting from, ORGANIC Farma Zdrowia has not been able to leverage it as much as its industry peers.
What does this mean?
Though ORGANIC Farma Zdrowia’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues ORGANIC Farma Zdrowia may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research ORGANIC Farma Zdrowia to get a better picture of the stock by looking at:
Financial Health: Is ORG’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.
