Measuring Orgenesis Inc’s (NASDAQ:ORGS) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ORGS’s recent performance announced on 30 November 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Orgenesis
Was ORGS’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 enables me to assess various companies in a uniform manner using the latest information. For Orgenesis, its most recent bottom-line (trailing twelve month) is -US$12.37M, which, relative to the prior year’s figure, has become more negative. Since these values are fairly short-term, I have computed an annualized five-year figure for Orgenesis’s earnings, which stands at -US$6.05M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze Orgenesis’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Orgenesis’s top-line has grown by 62.71% on average, indicating 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 biotechs industry has been growing its average earnings by double-digit 22.93% in the past twelve months, and 19.88% over the past five years. This means that whatever uplift the industry is profiting from, Orgenesis has not been able to reap as much as its average peer.
What does this mean?
Though Orgenesis’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Orgenesis may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Orgenesis to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is ORGS’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. Valuation: What is ORGS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ORGS is currently mispriced by the market.
- 3. 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 30 November 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.