Yahoo Finance Did Location Sciences Group PLC’s (LON:LSAI) Recent Earnings Growth Beat The Trend?
Investors with a long-term horizong may find it valuable to assess Location Sciences Group PLC’s (AIM:LSAI) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Location Sciences Group is currently performing. Check out our latest analysis for Location Sciences Group
Were LSAI’s earnings stronger than its past performances and the industry?
I look at data from the most recent 12 months, 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 allows me to analyze various companies on a similar basis, using the latest information. For Location Sciences Group, its most recent earnings (trailing twelve month) is -UK£3.52M, which, relative to the previous year’s level, has become less negative. Given that these values are relatively short-term thinking, I’ve calculated an annualized five-year figure for Location Sciences Group’s earnings, which stands at -UK£4.56M. This shows that, though net income is negative, it has become less negative over the years.
We can further assess Location Sciences Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Location Sciences Group’s top-line has risen by 12.60% on average, implying 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 software industry has been growing its average earnings by double-digit 22.04% over the past year, and 15.27% over the last five years. This means that whatever tailwind the industry is profiting from, Location Sciences Group has not been able to reap as much as its average peer.
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 predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Location Sciences Group may be facing and whether management guidance has consistently been met in the past. You should continue to research Location Sciences Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for LSAI’s future growth? Take a look at our free research report of analyst consensus for LSAI’s outlook.
Financial Health: Is LSAI’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 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.
