Yahoo Finance Does Forbidden Technologies plc's (LON:FBT) Past Performance Indicate A Weaker Future?
When Forbidden Technologies plc (LON:FBT) announced its most recent earnings (31 December 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 Forbidden Technologies 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 FBT has performed.
View our latest analysis for Forbidden Technologies
Was FBT's weak performance lately a part of a long-term decline?
FBT is loss-making, with the most recent trailing twelve-month earnings of -UK£2.6m (from 31 December 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 -UK£2.0m. Each year, for the past five years FBT has seen an annual increase in operating expense growth, outpacing revenue growth of 3.4%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Inspecting growth from a sector-level, the UK software industry has been growing its average earnings by double-digit 15% over the past year,
Even though Forbidden Technologies is currently unprofitable, it has a sufficient cash cushion (UK£5.0m) 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 difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Forbidden Technologies may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Forbidden Technologies to get a more holistic view of the stock by looking at:
Financial Health: Are FBT’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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
