Yahoo Finance Does MySQUAR Limited’s (LON:MYSQ) Past Performance Indicate A Weaker Future?
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on MySQUAR Limited (AIM:MYSQ) useful as an attempt to give more color around how MySQUAR is currently performing. View our latest analysis for MySQUAR
How Well Did MYSQ Perform?
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to assess different stocks in a uniform manner using the most relevant data points. For MySQUAR, its most recent trailing-twelve-month earnings is -US$2.58M, which, in comparison to last year’s level, has become more negative. Given that these values may be relatively nearsighted, I have calculated an annualized five-year figure for MYSQ’s net income, which stands at -US$1.98M. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.
We can further examine MySQUAR’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years MySQUAR’s top-line has grown by 65.84% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the UK internet industry has been growing its average earnings by double-digit 11.24% over the previous twelve months, and 20.38% over the past half a decade. This suggests that whatever tailwind the industry is enjoying, MySQUAR has not been able to realize the gains unlike its industry peers.
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 valuable step is to assess company-specific issues MySQUAR may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research MySQUAR to get a better picture of the stock by looking at:
Financial Health: Is MYSQ’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.
