After reading Fluidigm Corporation’s (NASDAQ:FLDM) latest earnings update (31 December 2017), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether FLDM has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways. See our latest analysis for Fluidigm
Did FLDM beat its long-term earnings growth trend and its industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze many different companies in a uniform manner using new information. For Fluidigm, its latest earnings (trailing twelve month) is -US$60.53M, which, in comparison to the previous year’s figure, has become less negative. Given that these values may be somewhat short-term thinking, I have determined an annualized five-year figure for Fluidigm’s earnings, which stands at -US$42.76M. This means that, Fluidigm has historically performed better than recently, while it seems like earnings are now heading back towards a more favorable position once more.
We can further analyze Fluidigm’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Fluidigm’s top-line has grown by 15.08% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the US life sciences industry has been growing its average earnings by double-digit 20.76% over the previous year, and 16.75% over the past five. This suggests that whatever tailwind the industry is benefiting from, Fluidigm has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Fluidigm may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Fluidigm to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FLDM’s future growth? Take a look at our free research report of analyst consensus for FLDM’s outlook.
- Financial Health: Is FLDM’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.
- 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 December 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.