PanTerra Gold Limited’s (ASX:PGI) Earnings Dropped -44.75%, Did Its Industry Show Weakness Too?
Examining PanTerra Gold Limited’s (ASX:PGI) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PGI’s latest performance announced on 31 December 2017 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for PanTerra Gold
Did PGI perform worse than its track record and industry?
For the most up-to-date info, 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 technique allows me to examine various companies on a more comparable basis, using the most relevant data points. For PanTerra Gold, its most recent bottom-line (trailing twelve month) is -US$9.99M, which compared to the prior year’s level, has become more negative. Since these values are somewhat short-term thinking, I have calculated an annualized five-year value for PanTerra Gold’s earnings, which stands at -US$7.66M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further assess PanTerra Gold’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade PanTerra Gold’s top-line has increased by 25.64% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 15.45% in the prior year, and 13.22% over the past five years. This shows that whatever uplift the industry is deriving benefit from, PanTerra Gold has not been able to gain as much as its industry peers.
What does this mean?
Though PanTerra Gold’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues PanTerra Gold may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research PanTerra Gold to get a better picture of the stock by looking at:
1. Financial Health: Is PGI’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 PGI 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 PGI 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 trailing twelve months from 31 December 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.
