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 Fulgent Genetics Inc’s (NASDAQ:FLGT) 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 Fulgent Genetics
How Well Did FLGT Perform?
I prefer to 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 examine different companies in a uniform manner using the latest information. For Fulgent Genetics, its latest trailing-twelve-month earnings is -US$2.51M, which compared to last year’s figure, has become less negative. Since these values are relatively short-term, I have estimated an annualized five-year value for Fulgent Genetics’s net income, which stands at -US$8.27M. This shows that, while net income is negative, it has become less negative over the years.
We can further examine Fulgent Genetics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Fulgent Genetics’s top-line has risen by 43.87% on average, signalling that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the US healthcare industry has been growing, albeit, at a muted single-digit rate of 9.96% in the prior year, and a substantial 10.39% over the past half a decade. This shows that, while Fulgent Genetics is presently loss-making, it may have benefited from industry tailwinds, moving earnings in the 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 difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Fulgent Genetics may be facing and whether management guidance has dependably been met in the past. You should continue to research Fulgent Genetics to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FLGT’s future growth? Take a look at our free research report of analyst consensus for FLGT’s outlook.
- Financial Health: Is FLGT’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.