Assessing Spirit of Texas Bancshares Inc’s (NASDAQ:STXB) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess STXB’s latest performance announced on 31 December 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for Spirit of Texas Bancshares
Did STXB beat its long-term earnings growth trend and its industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to assess various companies on a more comparable basis, using new information. For Spirit of Texas Bancshares, its latest trailing-twelve-month earnings is US$4.73M, which, against last year’s level, has moved up by 30.38%. Since these figures are fairly short-term thinking, I have determined an annualized five-year figure for Spirit of Texas Bancshares’s earnings, which stands at US$3.92M This shows that, on average, Spirit of Texas Bancshares has been able to steadily improve its bottom line over the past couple of years as well.
What’s enabled this growth? Let’s take a look at whether it is merely a result of an industry uplift, or if Spirit of Texas Bancshares has experienced some company-specific growth. Over the past couple of years, Spirit of Texas Bancshares grew its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Looking at growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 8.40% over the previous year, and a substantial 10.91% over the previous five years. This suggests that whatever uplift the industry is enjoying, Spirit of Texas Bancshares is capable of leveraging this to its advantage.
What does this mean?
Though Spirit of Texas Bancshares’s past data is helpful, it is only one aspect of my investment thesis. While Spirit of Texas Bancshares has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Spirit of Texas Bancshares to get a better picture of the stock by looking at:
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Financial Health: Is STXB’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.
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Valuation: What is STXB 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 STXB is currently mispriced by the market.
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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 2017. 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.