Despite announcing strong earnings, AngioDynamics, Inc.'s (NASDAQ:ANGO) stock was sluggish. We think that the market might be paying attention to some underlying factors are concerning.

See our latest analysis for AngioDynamics

The Impact Of Unusual Items On Profit

For anyone who wants to understand AngioDynamics' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from US$18m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that AngioDynamics' positive unusual items were quite significant relative to its profit in the year to August 2023. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On AngioDynamics' Profit Performance

As we discussed above, we think the significant positive unusual item makes AngioDynamics' earnings a poor guide to its underlying profitability. For this reason, we think that AngioDynamics' statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about AngioDynamics as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for AngioDynamics and you'll want to know about this.

Today we've zoomed in on a single data point to better understand the nature of AngioDynamics' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.