Interested In TTA Holdings Limited (ASX:TTA)? Here's How It Performed Recently
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess TTA Holdings Limited's (ASX:TTA) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for TTA Holdings
How Did TTA's Recent Performance Stack Up Against Its Past?
TTA is loss-making, with the most recent trailing twelve-month earnings of -AU$2.3m (from 30 September 2019), which compared to last year has become more negative. Furthermore, the company's loss seem to be growing over time, with the five-year earnings average of -AU$1.6m. Each year, for the past five years TTA has seen an annual decline in revenue of -25%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Inspecting growth from a sector-level, the Australian retail distributors industry has been relatively flat in terms of earnings growth over the past couple of years. This growth is a median of profitable companies of stocks internationally, operating in the Retail Distributors industry. I’ve decided to use a global peer group as there’s not enough companies in AU that are considered as appropriate peers, and I wanted to get a broader perspective on the regional growth. Some peers include Ruralco Holdings, Supply Network and Bapcor. This suggests that any near-term headwind the industry is facing, it’s hitting TTA Holdings harder than its peers.
Given that TTA Holdings is not profitable, even if operating expenses (SG&A and one-year R&D) continues to fall at previous year’s rate of -7.5%, the company’s current cash level (AU$258k) will still be insufficient to cover its expenses in the upcoming year. This is not a great sign in terms of operations and cash management. Even though this is analysis is fairly basic, and TTA Holdings still can cut its overhead further, or raise debt capital instead of coming to equity markets, the analysis still helps us understand how sustainable the TTA Holdings’s operation is, and when things may have to change.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues TTA Holdings may be facing and whether management guidance has steadily been met in the past. You should continue to research TTA Holdings to get a better picture of the stock by looking at:
Financial Health: Are TTA’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.
Valuation: What is TTA 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 TTA is currently mispriced by the market.
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 30 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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