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Understanding how ams AG (VTX:AMS) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how ams is doing by comparing its latest earnings with its long-term trend as well as the performance of its semiconductor industry peers.
Check out our latest analysis for ams
How Well Did AMS Perform?
AMS's trailing twelve-month earnings (from 31 December 2018) of €93m has increased by 9.3% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.5%, indicating the rate at which AMS is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is merely a result of industry tailwinds, or if ams has seen some company-specific growth.
In terms of returns from investment, ams has fallen short of achieving a 20% return on equity (ROE), recording 7.2% instead. Furthermore, its return on assets (ROA) of 0.4% is below the CH Semiconductor industry of 7.3%, indicating ams's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for ams’s debt level, has declined over the past 3 years from 15% to 2.5%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 14% to 141% over the past 5 years.
What does this mean?
Though ams's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be variables that are influencing the entire industry thus the high industry growth rate over the same time frame. You should continue to research ams 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 AMS’s future growth? Take a look at our free research report of analyst consensus for AMS’s outlook.
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Financial Health: Are AMS’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.