After looking at ProQR Therapeutics NV.’s (NASDAQ:PRQR) latest earnings announcement (30 September 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. 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 ProQR Therapeutics’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for ProQR Therapeutics
Was PRQR’s recent earnings decline indicative of a tough track record?
I use the ‘latest twelve-month’ data, 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 blend enables me to assess different stocks on a similar basis, using the latest information. For ProQR Therapeutics, its latest earnings (trailing twelve month) is -€41.17M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be somewhat short-term thinking, I’ve calculated an annualized five-year figure for PRQR’s net income, which stands at -€21.39M. This doesn’t look much better, as earnings seem to have gradually been getting more and more negative over time.
We can further evaluate ProQR Therapeutics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years ProQR Therapeutics’s top-line has grown by 38.57% on average, implying that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 13.11% over the past twelve months, and 19.44% over the last five years. This suggests that any tailwind the industry is enjoying, ProQR Therapeutics has not been able to leverage it as much as its average peer.
What does this mean?
ProQR Therapeutics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues ProQR Therapeutics may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research ProQR Therapeutics to get a better picture of the stock by looking at:
- 1. Financial Health: Is PRQR’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 trailing twelve months from 30 September 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.