Understanding Vical Incorporated’s (NASDAQ:VICL) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Vical is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for Vical
How Well Did VICL Perform?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to assess various companies on a similar basis, using the most relevant data points. For Vical, its latest earnings (trailing twelve month) is -US$16.41M, which, against the prior year’s level, has become more negative. Given that these figures may be fairly nearsighted, I’ve created an annualized five-year figure for VICL’s net income, which stands at -US$15.84M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further evaluate Vical’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Vical has seen an annual decline in revenue of -8.26%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 21.75% in the prior year, and 18.46% over the past five years. This shows that any uplift the industry is deriving benefit from, Vical has not been able to leverage it as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues Vical may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Vical to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for VICL’s future growth? Take a look at our free research report of analyst consensus for VICL’s outlook.
- Financial Health: Is VICL’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 March 2018. 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.