Riot Blockchain Inc (undefined:RIOT): Should The Recent EPS Drop Worry You?
Assessing Riot Blockchain Inc’s (NASDAQ:RIOT) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RIOT’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for Riot Blockchain
Did RIOT perform worse than its track record and industry?
For the most up-to-date info, I 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 technique allows me to examine different companies in a uniform manner using new information. For Riot Blockchain, the most recent twelve-month earnings -$9.9M, which compared to the prior year’s figure, has become more negative. Given that these figures are fairly short-term thinking, I’ve created an annualized five-year figure for RIOT’s earnings, which stands at -$9.4M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.
Additionally, we can evaluate Riot Blockchain’s loss by looking at what has been happening in the industry along with within the company. First, I want to quickly look into the line items. Revenue growth over last couple of years has been negative at -29.61%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the prior year, and 20.18% over the past five. This suggests that any tailwind the industry is deriving benefit from, Riot Blockchain has not been able to reap as much as its average peer.
What does this mean?
Riot Blockchain’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Riot Blockchain may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Riot Blockchain to get a better picture of the stock by looking at:
1. Financial Health: Is RIOT’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
