Orion Energy Systems Inc’s (NASDAQ:OESX) Earnings Dropped -10.89%, Did Its Industry Show Weakness Too?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Orion Energy Systems Inc’s (NASDAQ:OESX) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Orion Energy Systems
Was OESX’s recent earnings decline indicative of a tough track record?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to analyze different companies on a more comparable basis, using new information. For Orion Energy Systems, its most recent trailing-twelve-month earnings is -US$18.61M, which compared to the prior year’s figure, has become more negative. Since these figures may be relatively nearsighted, I’ve determined an annualized five-year figure for Orion Energy Systems’s earnings, which stands at -US$12.21M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further assess Orion Energy Systems’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Orion Energy Systems has seen an annual decline in revenue of -6.31%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US electrical industry has been growing, albeit, at a subdued single-digit rate of 5.99% over the previous year, and a substantial 11.49% over the past five. This means any uplift the industry is enjoying, Orion Energy Systems has not been able to leverage it as much as its average peer.
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 envisage what will happen in the future and when. The most valuable step is to assess company-specific issues Orion Energy Systems may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Orion Energy Systems to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OESX’s future growth? Take a look at our free research report of analyst consensus for OESX’s outlook.
2. Financial Health: Is OESX’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.
