Was EVINE Live Inc’s (NASDAQ:EVLV) Earnings Growth Better Than The Industry’s?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on EVINE Live Inc (NASDAQ:EVLV) useful as an attempt to give more color around how EVINE Live is currently performing. See our latest analysis for EVINE Live
Were EVLV’s earnings stronger than its past performances and the industry?
I prefer to use the ‘latest twelve-month’ data, 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 allows me to analyze various companies in a uniform manner using new information. For EVINE Live, its most recent trailing-twelve-month earnings is -US$4.24M, which, against the prior year’s figure, has become less negative. Since these values are somewhat nearsighted, I have calculated an annualized five-year figure for EVINE Live’s earnings, which stands at -US$16.33M. This means even though net income is negative, it has become less negative over the years.
We can further examine EVINE Live’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade EVINE Live’s top-line has increased by a mere 3.20%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the US online retail industry has been growing its average earnings by double-digit 44.43% in the previous twelve months, and 15.59% over the last five years. This means that, while EVINE Live is currently running a loss, it may have gained from industry tailwinds, moving earnings in the right direction.
What does this mean?
Though EVINE Live’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 envisage what will happen in the future and when. The most insightful step is to examine company-specific issues EVINE Live may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research EVINE Live to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for EVLV’s future growth? Take a look at our free research report of analyst consensus for EVLV’s outlook.
2. Financial Health: Is EVLV’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.
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 28 October 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.
