Has JMU Limited (JMU) Improved Earnings Growth In Recent Times?
Analyzing JMU Limited’s (NASDAQ:JMU) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess JMU’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for JMU
Could JMU beat the long-term trend and outperform 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 various companies on a similar basis, using new information. For JMU, the latest earnings -$23.1M, which, relative to the previous year’s figure, has become less negative. Since these figures are relatively short-term thinking, I have created an annualized five-year figure for JMU’s earnings, which stands at -$63.9M. This suggests that, even though net income is negative, it has become less negative over the years.
Additionally, we can assess JMU’s loss by looking at what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over last couple of years has grew by 15.90%, implying that JMU is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates. Eyeballing growth from a sector-level, the US internet software and services industry has been growing its average earnings by double-digit 15.49% over the previous twelve months, and 19.30% over the past five years. This means that, while JMU is presently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
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 difficult to predict what will happen in the future and when. The most valuable step is to examine company-specific issues JMU may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research JMU to get a more holistic view of the stock by looking at:
1. Financial Health: Is JMU’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.
2. Valuation: What is JMU worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether JMU is currently mispriced by the market.
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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
