After looking at Attis Industries Inc’s (NASDAQ:ATIS) latest earnings announcement (31 March 2018), 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. Check out our latest analysis for Attis Industries
Did ATIS beat its long-term earnings growth trend and its industry?
For the most up-to-date info, 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 technique enables me to examine different stocks on a similar basis, using the most relevant data points. For Attis Industries, its latest trailing-twelve-month earnings is -US$13.85M, which, in comparison to the prior year’s figure, has become less negative. Given that these values are relatively short-term, I’ve estimated an annualized five-year value for Attis Industries’s net income, which stands at -US$14.56M. This suggests that, while net income is negative, it has become less negative over the years.
We can further evaluate Attis Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Attis Industries’s top-line has increased by 17.09% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Viewing growth from a sector-level, the US commercial services industry has been growing, albeit, at a subdued single-digit rate of 6.32% over the previous twelve months, and a substantial 11.14% over the last five years. This suggests that, even though Attis Industries is presently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Attis Industries’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 predict what will happen in the future and when. The most valuable step is to examine company-specific issues Attis Industries may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Attis Industries to get a more holistic view of the stock by looking at:
- Financial Health: Is ATIS’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.
- Valuation: What is ATIS 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 ATIS is currently mispriced by the market.
- 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.