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When Regulus Therapeutics Inc (NASDAQ:RGLS) announced its most recent earnings (30 September 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Regulus Therapeutics performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see RGLS has performed. See our latest analysis for Regulus Therapeutics
How Well Did RGLS Perform?
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 enables me to assess many different companies on a similar basis, using the latest information. For Regulus Therapeutics, its latest earnings (trailing twelve month) is -US$77.48M, which, relative to the previous year’s level, has become more negative. Since these values are fairly myopic, I have estimated an annualized five-year value for RGLS’s net income, which stands at -US$44.10M. 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 evaluate Regulus Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Regulus Therapeutics has seen an annual decline in revenue of -15.56%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 22.22% over the prior year, and 19.51% over the past half a decade. This means that whatever tailwind the industry is deriving benefit from, Regulus Therapeutics has not been able to realize the gains unlike 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 difficult to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Regulus Therapeutics may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Regulus Therapeutics to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Future Outlook: What are well-informed industry analysts predicting for RGLS’s future growth? Take a look at this free research report of analyst consensus for RGLS’s outlook.
2. Financial Health: Is RGLS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a 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.