Assessing Totally plc’s (AIM:TLY) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess TLY’s recent performance announced on 30 June 2017 and evaluate these figures to its longer term trend and industry movements. See our latest analysis for Totally
Was TLY’s recent earnings decline worse than the long-term trend and the industry?
For the purpose of this commentary, I like 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 enables me to examine various companies on a similar basis, using new information. For Totally, its latest trailing-twelve-month earnings is -UK£1.63M, which, relative to the prior year’s level, has become more negative. Since these figures are relatively myopic, I’ve estimated an annualized five-year value for Totally’s earnings, which stands at -UK£640.93K. This doesn’t seem to paint a better picture, since earnings seem to have steadily been getting more and more negative over time.
We can further evaluate Totally’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Totally’s top-line has increased by 24.24% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the UK healthcare industry has been enduring some headwinds in the past twelve months, leading to an average earnings drop of -16.70%. This is a significant change, given that the industry has constantly been delivering a a robust growth of 16.47% in the previous five years. This suggests that whatever near-term headwind the industry is facing, it’s hitting Totally harder than its peers.
What does this mean?
Totally’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Totally may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Totally to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for TLY’s future growth? Take a look at our free research report of analyst consensus for TLY’s outlook.
- 2. Financial Health: Is TLY’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.
- 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 June 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.