Where Intrinsyc Technologies Corporation’s (TSE:ITC) Earnings Growth Stands Against Its Industry
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 Intrinsyc Technologies Corporation’s (TSX:ITC) 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 Intrinsyc Technologies
Did ITC perform worse than its track record and industry?
For the purpose of this commentary, 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 enables me to analyze various companies in a uniform manner using new information. For Intrinsyc Technologies, its latest earnings (trailing twelve month) is US$669.52K, which, relative to the prior year’s figure, has sunken by a large -47.24%. Since these figures may be relatively nearsighted, I have determined an annualized five-year figure for Intrinsyc Technologies’s net income, which stands at -US$283.48K This suggests that although earnings declined against the previous year, in the long run, Intrinsyc Technologies’s earnings have been growing on average.
What’s enabled this growth? Let’s take a look at if it is solely due to industry tailwinds, or if Intrinsyc Technologies has experienced some company-specific growth. In the past few years, Intrinsyc Technologies expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the Canadian software industry has been growing, albeit, at a unexciting single-digit rate of 9.30% over the past year, and a substantial 18.94% over the past five years. This shows that any tailwind the industry is benefiting from, Intrinsyc Technologies has not been able to reap as much as its industry peers.
What does this mean?
Intrinsyc Technologies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research Intrinsyc Technologies to get a better picture of the stock by looking at:
Financial Health: Is ITC’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 March 2018. 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.
