Assessing Genocea Biosciences Inc’s (NASDAQ:GNCA) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Genocea Biosciences is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechs industry peers. See our latest analysis for Genocea Biosciences
Was GNCA’s weak performance lately a part of a long-term decline?
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 blend enables me to assess different companies on a more comparable basis, using the most relevant data points. For Genocea Biosciences, its most recent bottom-line (trailing twelve month) is -US$56.71M, which compared to the previous year’s figure, has become more negative. Given that these figures are fairly short-term thinking, I have determined an annualized five-year figure for GNCA’s net income, which stands at -US$36.53M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further evaluate Genocea Biosciences’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Genocea Biosciences has seen an annual decline in revenue of -42.99%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 12.72% over the previous twelve months, and 19.21% over the past five years. This means that any tailwind the industry is benefiting from, Genocea Biosciences has not been able to gain as much as its average peer.
What does this mean?
Genocea Biosciences’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 forecast what will occur going forward, and when. The most useful step is to assess company-specific issues Genocea Biosciences may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Genocea Biosciences to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for GNCA’s future growth? Take a look at our free research report of analyst consensus for GNCA’s outlook.
- 2. Financial Health: Is GNCA’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 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.