Additionally, we can evaluate Predictive Discovery’s loss by researching what has been happening in the industry along with within the company. Firstly, I want to quickly look into the line items. Revenue growth over last couple of years has rose by 16.52%, implying that Predictive Discovery is in a high-growth phase with expenses shooting ahead of high top-line growth rates. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 6.76% in the previous year, and a substantial 10.06% over the previous few years. This shows that, though Predictive Discovery is currently loss-making, it may have gained from industry tailwinds, moving earnings in the right direction.

What does this mean?

Though Predictive Discovery’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues Predictive Discovery may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Predictive Discovery to get a more holistic view of the stock by looking at:

1. Financial Health: Is PDI’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.