When National American University Holdings Inc (NASDAQ:NAUH) released its most recent earnings update (31 August 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were National American University Holdings’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not NAUH actually performed well. Below is a quick commentary on how I see NAUH has performed. View our latest analysis for National American University Holdings
Was NAUH’s weak performance lately a part of a long-term decline?
I prefer 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 blend enables me to assess different companies in a uniform manner using the most relevant data points. National American University Holdings’s latest twelve-month earnings -$8.0M, which, against last year’s figure, has become more negative. Given that these figures are relatively myopic, I have created an annualized five-year figure for NAUH’s earnings, which stands at $2.8M.
Additionally, we can analyze National American University Holdings’s loss by looking at what has been happening in the industry along with within the company. Initially, I want to briefly look into the line items. Revenue growth over last couple of years has been negative at -3.81%. 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 diversified consumer services industry has been growing its average earnings by double-digit 28.32% over the prior year, and 13.80% over the previous five years. This means whatever uplift the industry is profiting from, National American University Holdings has not been able to gain as much as its industry peers.
What does this mean?
Though National American University Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues National American University Holdings may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research National American University Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is NAUH’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.