Where Hortonworks Inc (NASDAQ:HDP) Stands In Earnings Growth Against Its Industry
Assessing Hortonworks Inc’s (NASDAQ:HDP) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Hortonworks is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its internet industry peers. View our latest analysis for Hortonworks
Did HDP beat its long-term earnings growth trend and its industry?
I look at 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 enables me to examine many different companies in a uniform manner using new information. For Hortonworks, its latest earnings (trailing twelve month) is -US$204.51M, which, against the prior year’s figure, has become less negative. Since these figures are somewhat short-term thinking, I’ve determined an annualized five-year value for HDP’s earnings, which stands at -US$167.93M. This means Hortonworks has historically performed better than recently, although it seems like earnings are now heading back towards to right direction again.
We can further assess Hortonworks’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Hortonworks’s top-line has grown by 45.62% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 16.91% over the prior year, and 18.02% over the past five. This shows that, though Hortonworks is presently running a loss, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Hortonworks’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 predict what will happen in the future and when. The most insightful step is to assess company-specific issues Hortonworks may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Hortonworks to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HDP’s future growth? Take a look at our free research report of analyst consensus for HDP’s outlook.
Financial Health: Is HDP’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.
