ENDRA Life Sciences Inc (NASDAQ:NDRA): Does The -48.17% Earnings Decline Make It An Underperformer?
In this commentary, I will examine ENDRA Life Sciences Inc’s (NASDAQ:NDRA) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the medical equipment industry performed. As an investor, I find it beneficial to assess NDRA’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for ENDRA Life Sciences
Was NDRA weak performance lately part of a long-term decline?
For the most up-to-date info, I 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 technique enables me to analyze various companies on a more comparable basis, using new information. For ENDRA Life Sciences, its latest trailing-twelve-month earnings is -US$3.77M, which, relative to the prior year’s figure, has become more negative. Since these values may be relatively myopic, I have created an annualized five-year value for NDRA’s earnings, which stands at -US$2.76M. 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 examine ENDRA Life Sciences’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade ENDRA Life Sciences has seen an annual decline in revenue of -12.01%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 11.06% in the prior twelve months, and a more subdued 9.16% over the previous five years. This means that whatever tailwind the industry is benefiting from, ENDRA Life Sciences has not been able to gain as much as its industry peers.
What does this mean?
ENDRA Life Sciences’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 predict what will occur going forward, and when. The most useful step is to assess company-specific issues ENDRA Life Sciences may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research ENDRA Life Sciences to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Financial Health: Is NDRA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
2. Valuation: What is NDRA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in this free research report helps visualize whether NDRA is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a 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.
