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Where Horizon Global Corporation (NYSE:HZN) Stands In Earnings Growth Against Its Industry

After reading Horizon Global Corporation’s (NYSE:HZN) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Horizon Global’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Horizon Global

Commentary On HZN’s Past Performance

I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to analyze different companies on a more comparable basis, using new information. For Horizon Global, its most recent trailing-twelve-month earnings is -US$3.55M, which compared to the previous year’s level, has become less negative. Given that these values are somewhat nearsighted, I’ve calculated an annualized five-year figure for Horizon Global’s net income, which stands at US$2.52M.

NYSE:HZN Income Statement Mar 19th 18
NYSE:HZN Income Statement Mar 19th 18

We can further assess Horizon Global’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Horizon Global’s top-line has grown by 11.31% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Viewing growth from a sector-level, the US auto components industry has been growing, albeit, at a unexciting single-digit rate of 9.87% over the prior year, and a substantial 12.09% over the last five years. This means although Horizon Global is currently unprofitable, it may have been aided by industry tailwinds, moving earnings towards to right direction.

What does this mean?

Though Horizon Global’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 envisage what will happen in the future and when. The most valuable step is to examine company-specific issues Horizon Global may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Horizon Global to get a better picture of the stock by looking at:

  • 1. Future Outlook: What are well-informed industry analysts predicting for HZN’s future growth? Take a look at our free research report of analyst consensus for HZN’s outlook.

  • 2. Financial Health: Is HZN’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.

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