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With A -12.21% Earnings Drop, Did Corindus Vascular Robotics Inc (NYSEMKT:CVRS) Really Underperform?

When Corindus Vascular Robotics Inc (NYSEMKT:CVRS) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Corindus Vascular Robotics has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see CVRS has performed. See our latest analysis for Corindus Vascular Robotics

Was CVRS’s recent earnings decline indicative of a tough track record?

CVRS is loss-making, with the most recent trailing twelve-month earnings of -US$39.65m (from 31 March 2018), 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$27.49m. Each year, for the past five years CVRS has seen an annual increase in operating expense growth, outpacing revenue growth of 39.74%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Inspecting growth from a sector-level, the US medical equipment industry has been growing, albeit, at a muted single-digit rate of 8.02% over the past year, and 8.70% over the past half a decade. This suggests that any tailwind the industry is enjoying, Corindus Vascular Robotics has not been able to reap as much as its industry peers.

AMEX:CVRS Income Statement June 23rd 18
AMEX:CVRS Income Statement June 23rd 18

Although Corindus Vascular Robotics is loss-making, it has a sufficient cash cushion (US$43.95m) to pay for its upcoming operating expenses over the next year. This is a strong indication of good cash management.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Corindus Vascular Robotics may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Corindus Vascular Robotics to get a better picture of the stock by looking at:

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  1. Future Outlook: What are well-informed industry analysts predicting for CVRS’s future growth? Take a look at our free research report of analyst consensus for CVRS’s outlook.

  2. Financial Health: Is CVRS’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 31 March 2018. 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.