After reading Lightbridge Corporation’s (NASDAQ:LTBR) most recent earnings announcement (30 September 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Lightbridge’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Lightbridge
How Did LTBR’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, 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 method allows me to assess different stocks on a more comparable basis, using the most relevant data points. For Lightbridge, its latest trailing-twelve-month earnings is -$8.5M, which, relative to the previous year’s level, has become more negative. Since these figures are fairly nearsighted, I’ve determined an annualized five-year figure for LTBR’s earnings, which stands at -$5.2M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.
Additionally, we can examine Lightbridge’s loss by researching what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -39.30%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Scanning growth from a sector-level, the US professional services industry has been growing its average earnings by double-digit 10.06% in the past year, and a more subdued 9.29% over the past five. This shows that any uplift the industry is enjoying, Lightbridge has not been able to realize the gains unlike its industry peers.
What does this mean?
Though Lightbridge’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most useful step is to assess company-specific issues Lightbridge may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Lightbridge to get a more holistic view of the stock by looking at:
1. Financial Health: Is LTBR’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. 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.