Are Earnings Prospects Improving For Loss-Making Mediazest PLC’s (LON:MDZ)?
Investors with a long-term horizong may find it valuable to assess Mediazest PLC’s (AIM:MDZ) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Mediazest is currently performing. View our latest analysis for Mediazest
How Well Did MDZ Perform?
To account for any quarterly or half-yearly updates, 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 method enables me to examine different companies on a more comparable basis, using the latest information. For Mediazest, its latest earnings (trailing twelve month) is -UK£224.00K, which compared to the previous year’s level, has become less negative. Given that these values are fairly myopic, I have estimated an annualized five-year value for MDZ’s net income, which stands at -UK£454.20K. This means while net income is negative, it has become less negative over the years.
We can further assess Mediazest’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Mediazest’s top-line has grown by a mere 5.96%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the UK media industry has been growing, albeit, at a muted single-digit rate of 3.34% in the past twelve months, and 6.94% over the last five years. This suggests that even though Mediazest is currently running a loss, any near-term headwind the industry is facing, Mediazest is relatively better-cushioned than its peers.
What does this mean?
Mediazest’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 hard to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Mediazest may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Mediazest to get a more holistic view of the stock by looking at:
1. Financial Health: Is MDZ’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. Valuation: What is MDZ worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MDZ is currently mispriced by the market.
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.
