Understanding how Jason Industries Inc (NASDAQ:JASN) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Jason Industries is doing by comparing its latest earnings with its long-term trend as well as the performance of its machinery industry peers. See our latest analysis for Jason Industries
How Did JASN’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 method enables me to assess various companies on a more comparable basis, using new information. For Jason Industries, its latest earnings (trailing twelve month) is -US$8.26M, which compared to last year’s level, has become less negative. Given that these values are fairly short-term, I’ve estimated an annualized five-year figure for JASN’s earnings, which stands at -US$41.01M. This means that, despite the fact that net income is negative, it has become less negative over the years.
We can further evaluate Jason Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Jason Industries’s revenue growth has been relatively soft, with an annual growth rate of 0.0023%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the US machinery industry has been growing its average earnings by double-digit 21.79% over the previous year, and a more subdued 3.73% over the past five. This suggests that, even though Jason Industries is presently running a loss, 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 hard to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Jason Industries may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Jason Industries to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for JASN’s future growth? Take a look at our free research report of analyst consensus for JASN’s outlook.
- Financial Health: Is JASN’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.