After looking at Regnon Spólka Akcyjna’s (WSE:REG) 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 tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Regnon Spólka Akcyjna
How Did REG’s Recent Performance Stack Up Against Its Past?
I prefer to use 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 blend enables me to assess many different companies on a more comparable basis, using the latest information. For Regnon Spólka Akcyjna, its most recent bottom-line (trailing twelve month) is -ZŁ2.24M, which, against the previous year’s level, has become less negative. Since these figures may be somewhat short-term, I’ve computed an annualized five-year figure for REG’s net income, which stands at ZŁ74.63K.
We can further evaluate Regnon Spólka Akcyjna’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Regnon Spólka Akcyjna has seen an annual decline in revenue of -51.98%, 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 PL tech industry has been growing, albeit, at a unexciting single-digit rate of 6.61% over the prior twelve months, and 9.07% over the past five years. This shows that, though Regnon Spólka Akcyjna is currently unprofitable, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Regnon Spólka Akcyjna’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues Regnon Spólka Akcyjna may be facing and whether management guidance has consistently been met in the past. You should continue to research Regnon Spólka Akcyjna to get a better picture of the stock by looking at:
- 1. Financial Health: Is REG’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 REG 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 REG 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.