Assessing StoneMor Partners LP.’s (NYSE:STON) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess STON’s latest performance announced on 30 September 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for StoneMor Partners
How Did STON’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use 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 technique allows me to analyze many different companies on a similar basis, using new information. For StoneMor Partners, its latest trailing-twelve-month earnings is -US$35.34M, which, against last year’s figure, has become more negative. Given that these values are somewhat nearsighted, I have estimated an annualized five-year figure for StoneMor Partners’s net income, which stands at -US$18.07M. This doesn’t look much better, as earnings seem to have gradually been getting more and more negative over time.
We can further evaluate StoneMor Partners’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years StoneMor Partners’s top-line has grown by a mere 7.70%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the US consumer services industry has been growing its average earnings by double-digit 15.70% in the prior twelve months, and 15.07% over the last five years. This means any tailwind the industry is benefiting from, StoneMor Partners has not been able to reap as much as its industry peers.
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 happen in the future and when. The most valuable step is to examine company-specific issues StoneMor Partners may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research StoneMor Partners to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for STON’s future growth? Take a look at our free research report of analyst consensus for STON’s outlook.
- Financial Health: Is STON’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.
- 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 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.