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 Cesca Therapeutics Inc’s (NASDAQ:KOOL) 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. Check out our latest analysis for Cesca Therapeutics
Did KOOL’s recent earnings growth beat the long-term trend and the industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to assess different stocks on a similar basis, using new information. For Cesca Therapeutics, its most recent earnings is -$9.0M, which, relative to the prior year’s figure, has become less negative. Given that these values are fairly myopic, I have created an annualized five-year value for KOOL’s net income, which stands at -$12.0M. This means while net income is negative, it has become less negative over the years.
Additionally, we can analyze Cesca Therapeutics’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last few years has been negative at -8.91%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 18.95% over the prior twelve months, and a more subdued 9.07% over the past five. This suggests that, despite the fact that Cesca Therapeutics is currently running a loss, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Cesca Therapeutics may be facing and whether management guidance has steadily been met in the past. You should continue to research Cesca Therapeutics to get a better picture of the stock by looking at:
1. Financial Health: Is KOOL’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.