How Does The People’s Operator Plc’s (LON:TPOP) Earnings Growth Stack Up Against Industry Performance?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess The People’s Operator Plc’s (AIM:TPOP) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for People’s Operator
Did TPOP’s recent earnings growth beat the long-term trend and the industry?
I look at 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 analyze different stocks on a more comparable basis, using new information. For People’s Operator, its latest trailing-twelve-month earnings is -£7.2M, which, in comparison to the previous year’s level, has become less negative. Given that these values are somewhat nearsighted, I’ve estimated an annualized five-year figure for People’s Operator’s net income, which stands at -£4.7M. This means that, People’s Operator 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 assess People’s Operator’s loss by looking at what has been happening in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the last couple of years has risen by 64.74%, signalling that People’s Operator is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates, leading to yearly losses. Scanning growth from a sector-level, the UK wireless telecommunication services industry has been enduring some headwinds in the previous twelve months, leading to average earnings dropping by more than half. This is a a strong change, given that the industry has been delivering a relatively flat growth rate over the previous couple of years. This means that although People’s Operator is presently loss-making, whatever near-term headwind the industry is enduring, People’s Operator is relatively better-cushioned than its peers.
What does this mean?
Though People’s Operator’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues People’s Operator may be facing and whether management guidance has steadily been met in the past. You should continue to research People’s Operator to get a better picture of the stock by looking at:
1. Financial Health: Is TPOP’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 June 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.
