We can further assess Carnarvon Petroleum’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Carnarvon Petroleum has seen an annual decline in revenue of -56.41%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the Australian oil and gas industry has been amplifying growth, more than doubling average earnings in the prior twelve months, and a notable 14.10% over the past five. This suggests that any tailwind the industry is enjoying, Carnarvon Petroleum 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. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues Carnarvon Petroleum may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Carnarvon Petroleum to get a better picture of the stock by looking at:
- 1. Financial Health: Is CVN’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 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.