Stanley Furniture Company Inc (STLY)’s Earnings Grew 74.9%, Is It Enough?
Analyzing Stanley Furniture Company Inc’s (NASDAQ:STLY) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess STLY’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Stanley Furniture Company
How Did STLY’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to examine various companies in a uniform manner using the latest information. Stanley Furniture Company’s latest earnings -$1M, which, in comparison to the previous year’s figure, has become less negative. Given that these figures may be somewhat short-term thinking, I have calculated an annualized five-year figure for STLY’s earnings, which stands at -$1M. This shows that, though net income is negative, it has become less negative over the years.
We can further analyze Stanley Furniture Company’s loss by looking at what’s going on in the industry along with within the company. Initially, I want to quickly look into the line items. Revenue growth over past few years has been negative at -16.95%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the US household durables industry has been growing, albeit, at a subdued single-digit rate of 9.92% over the prior year, and a substantial 17.23% over the previous five years. This suggests that, despite the fact that Stanley Furniture Company is presently running a loss, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Stanley Furniture Company’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 forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Stanley Furniture Company may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Stanley Furniture Company to get a more holistic view of the stock by looking at:
1. Financial Health: Is STLY’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. 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.
