Want To Invest In ServiceSource International Inc (NASDAQ:SREV)? Here’s How It Performed Lately
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at ServiceSource International Inc’s (NASDAQ:SREV) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for ServiceSource International
Could SREV beat the long-term trend and outperform its industry?
I like 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 technique allows me to analyze various companies on a similar basis, using the latest information. For ServiceSource International, its most recent bottom-line (trailing twelve month) is -US$29.85M, which, against the previous year’s figure, has become less negative. Since these values are fairly myopic, I have created an annualized five-year value for ServiceSource International’s net income, which stands at -US$34.80M. This shows that, although net income is negative, it has become less negative over the years.
We can further analyze ServiceSource International’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade ServiceSource International’s top-line has risen by a mere 3.20%, 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 it industry has been growing, albeit, at a unexciting single-digit rate of 4.35% over the past year, and a substantial 12.74% over the previous five years. This means even though ServiceSource International is currently unprofitable, whatever recent headwind the industry is experiencing, ServiceSource International is less exposed compared to its peers.
What does this mean?
Though ServiceSource International’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues ServiceSource International may be facing and whether management guidance has dependably been met in the past. You should continue to research ServiceSource International to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Future Outlook: What are well-informed industry analysts predicting for SREV’s future growth? Take a look at this free research report of analyst consensus for SREV’s outlook.
2. Financial Health: Is SREV’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a 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.
