After looking at Pain Therapeutics Inc’s (NASDAQ:PTIE) latest earnings announcement (30 September 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Pain Therapeutics’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Pain Therapeutics
How Did PTIE’s Recent Performance Stack Up Against Its Past?
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 technique enables me to assess different companies on a more comparable basis, using the most relevant data points. For Pain Therapeutics, its most recent trailing-twelve-month earnings is -$12.0M, which, relative to last year’s level, has become less negative. Since these values may be relatively short-term, I’ve computed an annualized five-year figure for PTIE’s earnings, which stands at -$4.2M. This shows that, Pain Therapeutics has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.
Additionally, we can assess Pain Therapeutics’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last few years has risen by 34.95%, signalling that Pain Therapeutics is in a high-growth period with expenses shooting ahead of high top-line growth rates, leading to yearly losses. Looking at growth from a sector-level, the US pharmaceuticals industry has been growing, albeit, at a unexciting single-digit rate of 6.91% in the prior twelve months, and a substantial 11.55% over the previous five years. This suggests that, while Pain Therapeutics is presently unprofitable, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Pain Therapeutics may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Pain Therapeutics to get a better picture of the stock by looking at:
1. Financial Health: Is PTIE’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.
2. 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.