For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Bridgeline Digital Inc (NASDAQ:BLIN) useful as an attempt to give more color around how Bridgeline Digital is currently performing. See our latest analysis for Bridgeline Digital
How Well Did BLIN Perform?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to analyze different stocks in a uniform manner using the latest information. For Bridgeline Digital, its latest trailing-twelve-month earnings is -US$1.91M, which compared to the prior year’s level, has become less negative. Given that these figures are somewhat short-term, I’ve computed an annualized five-year figure for Bridgeline Digital’s net income, which stands at -US$5.64M. This suggests that, although net income is negative, it has become less negative over the years.
We can further examine Bridgeline Digital’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Bridgeline Digital has seen an annual decline in revenue of -9.39%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 14.78% in the prior twelve months, and 16.35% over the previous five years. This shows that, although Bridgeline Digital is currently loss-making, it may have gained from industry tailwinds, moving earnings into a more favorable position.
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 forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues Bridgeline Digital may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Bridgeline Digital to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for BLIN’s future growth? Take a look at our free research report of analyst consensus for BLIN’s outlook.
- 2. Financial Health: Is BLIN’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.
- 3. 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 December 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.