Interested In Urthecast Corp (TSE:UR)? Here’s How It Performed Recently
When Urthecast Corp (TSX:UR) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Urthecast performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see UR has performed. View our latest analysis for Urthecast
How UR fared against its long-term earnings performance and its industry
I 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 blend enables me to examine different companies on a similar basis, using the latest information. For Urthecast, its most recent trailing-twelve-month earnings is -CA$23.70M, which compared to the previous year’s level, has become less negative. Since these figures may be relatively short-term, I have calculated an annualized five-year figure for Urthecast’s net income, which stands at -CA$19.31M. This means that, Urthecast has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.
We can further assess Urthecast’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Urthecast’s top-line has grown by 74.41% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Looking at growth from a sector-level, the Canadian internet industry has been enduring some headwinds in the prior year, leading to an average earnings drop of -22.72%. This is a momentous change, given that the industry has constantly been delivering a a notable growth of 28.18% in the previous five years. This means that while Urthecast is presently unprofitable, any recent headwind the industry is enduring, Urthecast is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most useful step is to examine company-specific issues Urthecast may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Urthecast to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for UR’s future growth? Take a look at our free research report of analyst consensus for UR’s outlook.
2. Financial Health: Is UR’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.
