ASX:ROG Income Statement Dec 24th 17
We can further analyze Red Sky Energy’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -34.71%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the Australian oil and gas industry has been enduring some headwinds over the past year, leading to an average earnings drop of -25.18%. This is a major change, given that the industry has constantly been delivering a a solid growth of 28.17% in the past five years. This shows that whatever near-term headwind the industry is facing, it’s hitting Red Sky Energy harder than its peers.
What does this mean?
Red Sky Energy’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 envisage what will occur going forward, and when. The most valuable step is to assess company-specific issues Red Sky Energy may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Red Sky Energy to get a better picture of the stock by looking at:
1. Financial Health: Is ROG’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. Valuation: What is ROG 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 ROG is currently mispriced by the market.
3. 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.