Examining Interlink Electronics Inc’s (NASDAQ:LINK) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess LINK’s latest performance announced on 30 September 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Interlink Electronics
Did LINK perform worse than its track record and industry?
I look at the ‘latest twelve-month’ data, 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 method allows me to analyze many different companies on a similar basis, using the latest information. For Interlink Electronics, the most recent earnings is $2M, which, against last year’s level, has fallen by -10.76%. Given that these figures may be fairly nearsighted, I have determined an annualized five-year figure for Interlink Electronics’s net income, which stands at $1M. This means though earnings growth was negative from the prior year, over the long run, Interlink Electronics’s earnings have been rising on average.What’s enabled this growth? Let’s take a look at whether it is merely because of an industry uplift, or if Interlink Electronics has seen some company-specific growth. Over the last few years, Interlink Electronics increased its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US electronic equipment, instruments and components industry has been growing its average earnings by double-digit 24.07% over the prior twelve months, and a more muted 5.69% over the past five. This shows that whatever uplift the industry is deriving benefit from, Interlink Electronics has not been able to reap as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Interlink Electronics to get a better picture of the stock by looking at:
1. Financial Health: Is LINK’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 LINK 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 LINK 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.