Want To Invest In Carbon Energy Limited (ASX:CNX)? Here’s How It Performed Lately
Examining Carbon Energy Limited’s (ASX:CNX) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CNX’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. View our latest analysis for Carbon Energy
How CNX fared against its long-term earnings performance and its industry
I prefer to 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 method allows me to assess many different companies on a similar basis, using new information. For Carbon Energy, its latest trailing-twelve-month earnings is -AU$4.67M, which, relative to last year’s figure, has become less negative. Since these values may be somewhat short-term, I’ve determined an annualized five-year figure for Carbon Energy’s earnings, which stands at -AU$32.65M. This means that, even though net income is negative, it has become less negative over the years.
We can further analyze Carbon Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Carbon Energy has seen an annual decline in revenue of -52.15%, 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 Australian oil and gas industry has been growing growth, more than doubling average earnings over the prior year, and a notable 11.17% over the last five years. This means any uplift the industry is enjoying, Carbon Energy has not been able to reap as much as its average peer.
What does this mean?
Carbon Energy’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Carbon Energy may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Carbon Energy to get a better picture of the stock by looking at:
Financial Health: Is CNX’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 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.
