Does SSLJcom Limited’s (NASDAQ:SSLJ) Past Performance Indicate A Weaker Future?
When SSLJcom Limited’s (NASDAQ:SSLJ) announced its latest earnings (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were SSLJ.com’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SSLJ actually performed well. Below is a quick commentary on how I see SSLJ has performed. See our latest analysis for SSLJ.com
Was SSLJ’s recent earnings decline worse than the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 technique allows me to examine many different companies on a more comparable basis, using the most relevant data points. For SSLJ.com, its most recent trailing-twelve-month earnings is -US$17.92M, which, against the prior year’s level, has become more negative. Given that these figures are somewhat short-term, I have determined an annualized five-year value for SSLJ.com’s earnings, which stands at -US$12.12M. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further evaluate SSLJ.com’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade SSLJ.com’s top-line more than doubled on average, implying that the business is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the US consumer services industry has been multiplying average earnings growth of 62.52% in the prior year, and a less exciting 6.52% over the past half a decade. This shows that whatever uplift the industry is profiting from, SSLJ.com has not been able to gain as much as its average peer.
What does this mean?
SSLJ.com’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues SSLJ.com may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research SSLJ.com to get a better picture of the stock by looking at:
1. Financial Health: Is SSLJ’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.
