Assessing Sphere 3D Corp’s (NASDAQ:ANY) 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 ANY’s recent performance announced on 31 March 2018 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Sphere 3D
How ANY fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, 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 technique enables me to analyze various companies on a more comparable basis, using the most relevant data points. For Sphere 3D, its latest earnings (trailing twelve month) is -US$25.20M, which, relative to last year’s level, has become less negative. Given that these figures are somewhat nearsighted, I have created an annualized five-year value for ANY’s earnings, which stands at -US$26.26M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine Sphere 3D’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Sphere 3D’s top-line has risen by 44.82% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Looking at growth from a sector-level, the US software industry has been growing its average earnings by double-digit 13.27% over the past year, and 12.92% over the past five years. This shows that, even though Sphere 3D is presently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Sphere 3D may be facing and whether management guidance has steadily been met in the past. You should continue to research Sphere 3D to get a more holistic view of the stock by looking at:
- Financial Health: Is ANY’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.
- Valuation: What is ANY 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 ANY is currently mispriced by the market.
- 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.