For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Nxt-ID Inc’s (NASDAQ:NXTD) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for Nxt-ID
Commentary On NXTD’s Past Performance
I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to assess various companies on a similar basis, using the most relevant data points. For Nxt-ID, its most recent bottom-line (trailing twelve month) is -US$9.59M, which compared to the previous year’s level, has become more negative. Given that these values are fairly nearsighted, I’ve determined an annualized five-year value for NXTD’s net income, which stands at -US$7.15M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze Nxt-ID’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Nxt-ID’s top-line has increased by 61.37% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Scanning growth from a sector-level, the US software industry has been growing its average earnings by double-digit 13.27% in the past twelve months, and 12.97% over the last five years. This suggests that any uplift the industry is profiting from, Nxt-ID has not been able to reap as much as its average peer.
What does this mean?
Nxt-ID’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Nxt-ID may be facing and whether management guidance has regularly been met in the past. You should continue to research Nxt-ID to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for NXTD’s future growth? Take a look at our free research report of analyst consensus for NXTD’s outlook.
- Financial Health: Is NXTD’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.
- 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 March 2018. 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.