Does OvaScience Inc’s (NASDAQ:OVAS) Past Performance Indicate A Stronger Future?
In this commentary, I will examine OvaScience Inc’s (NASDAQ:OVAS) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the biotechs industry performed. As an investor, I find it beneficial to assess OVAS’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for OvaScience
Could OVAS beat the long-term trend and outperform its industry?
For the most up-to-date info, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to examine many different companies on a more comparable basis, using new information. For OvaScience, its latest trailing-twelve-month earnings is -US$65.09M, which, in comparison to last year’s level, has become less negative. Given that these figures are relatively nearsighted, I’ve estimated an annualized five-year value for OvaScience’s net income, which stands at -US$48.98M. This means OvaScience has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards a more favorable position once more.
We can further examine OvaScience’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade OvaScience’s top-line has increased by 54.31% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 24.94% in the prior twelve months, and 20.47% over the past five years. This suggests that whatever tailwind the industry is benefiting from, OvaScience has not been able to realize the gains unlike its industry peers.
What does this mean?
OvaScience’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most insightful step is to examine company-specific issues OvaScience may be facing and whether management guidance has steadily been met in the past. You should continue to research OvaScience to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OVAS’s future growth? Take a look at our free research report of analyst consensus for OVAS’s outlook.
2. Financial Health: Is OVAS’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 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.
