Sangamo Therapeutics Inc (NASDAQ:SGMO): Has Recent Earnings Growth Beaten Long-Term Trend?
Examining how Sangamo Therapeutics Inc (NASDAQ:SGMO) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Sangamo Therapeutics is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechnology industry peers. Check out our latest analysis for Sangamo Therapeutics
Could SGMO beat the long-term trend and outperform its industry?
I look at data from the most recent 12 months, 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 analyze many different companies on a more comparable basis, using the most relevant data points. For Sangamo Therapeutics, its most recent earnings is -$51.1M, which, against the prior year’s figure, has become less negative. Given that these values may be somewhat short-term thinking, I’ve estimated an annualized five-year figure for Sangamo Therapeutics’s net income, which stands at -$37.6M. This shows that, Sangamo Therapeutics has historically performed better than recently, while it seems like earnings are now heading back towards a more favorable position once more.
We can further examine Sangamo Therapeutics’s loss by looking at what’s going on 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 grown by 10.96%, indicating that Sangamo Therapeutics is in a high-growth phase with expenses racing ahead elevated top-line growth rates, leading to yearly losses. Eyeballing growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% in the previous year, and 20.18% over the past couple of years. This means though Sangamo Therapeutics is currently loss-making, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
Sangamo Therapeutics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Sangamo Therapeutics may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Sangamo Therapeutics to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SGMO’s future growth? Take a look at our free research report of analyst consensus for SGMO’s outlook.
2. Financial Health: Is SGMO’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
