Yahoo Finance Are Earnings Prospects Improving For Loss-Making Mediazest PLC’s (LON:MDZ)?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Mediazest PLC (AIM:MDZ) useful as an attempt to give more color around how Mediazest is currently performing. See our latest analysis for Mediazest
Were MDZ’s earnings stronger than its past performances and the industry?
I prefer to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to analyze different stocks in a uniform manner using the latest information. For Mediazest, its latest earnings (trailing twelve month) is -UK£224.00K, which, in comparison to the previous year’s figure, has become less negative. Since these figures are relatively short-term thinking, I have determined an annualized five-year value for Mediazest’s earnings, which stands at -UK£454.10K. This shows that, although net income is negative, it has become less negative over the years.
We can further evaluate Mediazest’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Mediazest’s top-line has increased by a mere 5.68%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the UK media industry has been growing its average earnings by double-digit 30.40% over the past year, and a less exciting 8.67% over the past five years. This suggests that whatever uplift the industry is benefiting from, Mediazest has not been able to realize the gains unlike its average peer.
What does this mean?
Though Mediazest’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Mediazest may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Mediazest to get a more holistic view of the stock by looking at:
Financial Health: Is MDZ’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.
Valuation: What is MDZ 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 MDZ is currently mispriced by the market.
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 30 September 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.
