In This Article:
When AKWEL (EPA:AKW) released its most recent earnings update (30 June 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were AKWEL’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not AKW actually performed well. Below is a quick commentary on how I see AKW has performed.
View our latest analysis for AKWEL
How Well Did AKW Perform?
AKW’s trailing twelve-month earnings (from 30 June 2018) of €82m has declined by -10.0% 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 23%, indicating the rate at which AKW is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, AKWEL has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 11% exceeds the FR Auto Components industry of 6.7%, indicating AKWEL has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for AKWEL’s debt level, has increased over the past 3 years from 17% to 19%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 41% to 28% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research AKWEL to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for AKW’s future growth? Take a look at our free research report of analyst consensus for AKW’s outlook.
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Financial Health: Are AKW’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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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 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.