How Has Ideal Power Inc’s (NASDAQ:IPWR) Earnings Performed Against The Industry?
Measuring Ideal Power Inc’s (NASDAQ:IPWR) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess IPWR’s recent performance announced on 30 September 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Ideal Power
Did IPWR perform worse than its track record and industry?
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to examine many different companies on a more comparable basis, using the most relevant data points. For Ideal Power, its latest trailing-twelve-month earnings is -$11.3M, which, against the previous year’s figure, has become more negative. Given that these figures may be fairly short-term, I have estimated an annualized five-year figure for Ideal Power’s earnings, which stands at -$8.8M. This doesn’t look much better, as earnings seem to have steadily been getting more and more negative over time.
Additionally, we can assess Ideal Power’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over the last couple of years has risen by a mere 7.63%. Since top-line growth is also pretty stale the key to profitability in the future would be controlling costs. Scanning growth from a sector-level, the US electrical industry has been growing its average earnings by double-digit 24.45% in the past year, and a more muted 4.93% over the past five years. This means whatever uplift the industry is enjoying, Ideal Power has not been able to realize the gains unlike its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Ideal Power may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Ideal Power to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for IPWR’s future growth? Take a look at our free research report of analyst consensus for IPWR’s outlook.
2. Financial Health: Is IPWR’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 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.
