ASX:MEY Income Statement Dec 26th 17
We can further evaluate Marenica Energy’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last couple of years has more than doubled, signalling that Marenica Energy is in a high-growth phase with expenses shooting ahead of high top-line growth rates, leading to yearly losses. Inspecting growth from a sector-level, the Australian oil and gas industry has been enduring some headwinds over the previous twelve months, leading to an average earnings drop of -25.18%. This is a major change, given that the industry has constantly been delivering a a robust growth of 28.17% in the previous five years. This means that despite the fact that Marenica Energy is presently unprofitable, whatever recent headwind the industry is facing, the impact on Marenica Energy has been softer relative to its peers.
What does this mean?
Marenica 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 forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Marenica Energy may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Marenica Energy to get a more holistic view of the stock by looking at:
1. Financial Health: Is MEY’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.