Measuring Asta Funding Inc’s (NASDAQ:ASFI) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ASFI’s recent performance announced on 30 June 2017 and weigh these figures against its long-term trend and industry movements. See our latest analysis for ASFI
Was ASFI’s recent earnings decline indicative of a tough track record?
For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 blend allows me to analyze different companies on a similar basis, using the latest information. For Asta Funding, the most recent earnings -$0.7M, which, relative to the previous year’s figure, has turned from positive to negative. Since these figures may be fairly myopic, I’ve estimated an annualized five-year value for Asta Funding’s earnings, which stands at $4.9M.
Additionally, we can examine Asta Funding’s loss by looking at what’s going on in the industry along with within the company. Initially, I want to briefly look into the line items. Revenue growth over last few years has risen by a mere 2.34%. Given that top-line growth is also pretty stale the key to profitability in the future would be managing costs. Scanning growth from a sector-level, the US consumer finance industry has been relatively flat in terms of earnings growth over the previous few years. This shows that any recent headwind the industry is facing, it’s hitting Asta Funding harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will occur going forward, and when. The most insightful step is to assess company-specific issues Asta Funding may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Asta Funding to get a more holistic view of the stock by looking at:
1. Financial Health: Is ASFI’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.