Where Moxian Inc (MOXC) Stands In Terms Of Earnings Growth Against Its Industry
After reading Moxian Inc’s (NASDAQ:MOXC) most recent earnings announcement (30 June 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 Moxian’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Moxian
Was MOXC’s weak performance lately a part of a long-term decline?
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 allows me to assess many different companies on a similar basis, using the most relevant data points. For Moxian, the latest twelve-month earnings -$15M, which compared to the previous year’s level, has become more negative. Given that these figures are fairly myopic, I have computed an annualized five-year value for MOXC’s net income, which stands at -$5M. This doesn’t seem to paint a better picture, as earnings seem to have steadily been getting more and more negative over time.
Additionally, we can assess Moxian’s loss by looking at what has been happening in the industry on top of within the company. First, I want to quickly look into the line items. Revenue growth over last couple of years has been negative at -33.41%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the US internet software and services industry has been growing its average earnings by double-digit 18.01% in the previous twelve months, and 22.48% over the previous few years. This shows that any uplift the industry is enjoying, Moxian has not been able to reap as much as its industry peers.
What does this mean?
Though Moxian’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Moxian may be facing and whether management guidance has consistently been met in the past. You should continue to research Moxian to get a better picture of the stock by looking at:
1. Financial Health: Is MOXC’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
