Examining how Yuma Energy Inc (AMEX:YUMA) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Yuma Energy is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its oil and gas industry peers. View our latest analysis for Yuma Energy
Could YUMA beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to analyze different stocks on a similar basis, using the most relevant data points. For Yuma Energy, its most recent bottom-line is -$15.5M, which, relative to the previous year’s level, has become less negative. Since these figures may be somewhat short-term thinking, I’ve determined an annualized five-year value for YUMA’s net income, which stands at -$44.0M. This means that, though net income is negative, it has become less negative over the years.
We can further assess Yuma Energy’s loss by researching what has been happening in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the past few years has been negative at -39.81%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 17.75% in the prior twelve months, . This is a change from a volatile drop of -7.31% in the past few years. This means that, despite the fact that Yuma Energy is presently unprofitable, it may have only just been aided by the recent industry expansion, moving earnings in the right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most useful step is to assess company-specific issues Yuma Energy may be facing and whether management guidance has consistently been met in the past. You should continue to research Yuma Energy to get a more holistic view of the stock by looking at:
1. Financial Health: Is YUMA’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 YUMA 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 YUMA 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 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.