Assessing Trinity Biotech plc’s (NASDAQ:TRIB) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Trinity Biotech is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its medical equipment industry peers. Check out our latest analysis for Trinity Biotech
Was TRIB’s recent earnings decline worse than the long-term trend and the industry?
TRIB is loss-making, with the most recent trailing twelve-month earnings of -US$39.53m (from 31 March 2018), which compared to last year has become more negative. Over the past five years, its average earnings level was positive at US$3.74m, which meant its expenses has only exceeded revenues recently, pulling TRIB into the loss-making zone.
Each year, for the past five years TRIB has seen an annual increase in operating expense growth, outpacing revenue growth of 4.29%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Viewing growth from a sector-level, the US medical equipment industry has been
Although Trinity Biotech is loss-making, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of US$36.55m) over the next year. This is a strong indication of good cash management.
What does this mean?
Trinity Biotech’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 hard to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Trinity Biotech may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Trinity Biotech to get a more holistic view of the stock by looking at:
- Financial Health: Is TRIB’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 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.