Examining ABC arbitrage SA's (ENXTPA:ABCA) 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 ABCA's latest performance announced on 31 December 2019 and weigh these figures against its longer term trend and industry movements.

See our latest analysis for ABC arbitrage

How Did ABCA's Recent Performance Stack Up Against Its Past?

ABCA's trailing twelve-month earnings (from 31 December 2019) of €18m has declined by -6.8% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -4.5%, indicating the rate at which ABCA is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and if the whole industry is experiencing the hit as well.

In terms of returns from investment, ABC arbitrage has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 13% exceeds the FR Diversified Financial industry of 3.5%, indicating ABC arbitrage has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for ABC arbitrage’s debt level, has declined over the past 3 years from 19% to 13%.

What does this mean?

ABC arbitrage's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. In some cases, companies that endure a drawn out period of diminishing earnings are undergoing some sort of reinvestment phase in order to keep up with the latest industry growth and disruption. You should continue to research ABC arbitrage to get a better picture of the stock by looking at:

1. Financial Health: Are ABCA’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 ABCA 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 ABCA 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 trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.

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