Where PROS Holdings, Inc.'s (NYSE:PRO) Earnings Growth Stands Against Its Industry
Understanding how PROS Holdings, Inc. (NYSE:PRO) 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 PROS Holdings is doing by comparing its latest earnings with its long-term trend as well as the performance of its software industry peers.
View our latest analysis for PROS Holdings
How Well Did PRO Perform?
PRO is loss-making, with the most recent trailing twelve-month earnings of -US$69.1m (from 31 December 2019), which compared to last year has become more negative. Furthermore, the company's loss seem to be growing over time, with the five-year earnings average of -US$51.1m. Each year, for the past five years PRO has seen an annual increase in operating expense growth, outpacing revenue growth of 5.8%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Looking at growth from a sector-level, the US software industry has been growing its average earnings by double-digit 17% in the previous year, and 24% over the past half a decade. This growth is a median of profitable companies of 25 Software companies in US including SolarWinds, salesforce.com and ZIM. This suggests that whatever uplift the industry is deriving benefit from, PROS Holdings has not been able to gain as much as its average peer.
Although PROS Holdings is loss-making, it has a sufficient cash cushion (US$306m) to pay for its upcoming operating expenses over the next year. This is a sign of good cash management.
What does this mean?
Though PROS Holdings's past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues PROS Holdings may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research PROS Holdings to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for PRO’s future growth? Take a look at our free research report of analyst consensus for PRO’s outlook.
Financial Health: Are PRO’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 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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