Examining FSA Group Limited’s (ASX:FSA) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess FSA’s latest performance announced on 31 December 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for FSA Group

Could FSA beat the long-term trend and outperform its industry?

To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to examine various companies in a uniform manner using the latest information. For FSA Group, its most recent bottom-line (trailing twelve month) is AU$15.18M, which, relative to the prior year’s level, has jumped up by 19.04%. Since these values may be relatively short-term, I’ve created an annualized five-year figure for FSA Group’s earnings, which stands at AU$11.81M This means that, on average, FSA Group has been able to steadily raise its earnings over the past few years as well.

What’s enabled this growth? Let’s take a look at if it is solely due to an industry uplift, or if FSA Group has seen some company-specific growth. In the last few years, FSA Group increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the Australian consumer finance industry has been growing its average earnings by double-digit 19.43% over the past year, and 41.44% over the last five years. This suggests that any tailwind the industry is profiting from, FSA Group has not been able to realize the gains unlike its average peer.

What does this mean?

FSA Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While FSA Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research FSA Group to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for FSA’s future growth? Take a look at our free research report of analyst consensus for FSA’s outlook.

2. Financial Health: Is FSA’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.

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 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.