How Does NMC Health Plc’s (LON:NMC) Earnings Growth Stack Up Against Industry Performance?

Analyzing NMC Health Plc’s (LSE:NMC) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess NMC’s recent performance announced on 30 June 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for NMC Health

Were NMC’s earnings stronger than its past performances and the industry?

I like to 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 allows me to examine different companies on a more comparable basis, using the latest information. For NMC Health, its latest trailing-twelve-month earnings is $158.0M, which, in comparison to the previous year’s figure, has escalated by a substantial 50.58%. Since these values are fairly myopic, I’ve estimated an annualized five-year value for NMC Health’s earnings, which stands at $81.6M. This suggests that, on average, NMC Health has been able to steadily grow its profits over the last couple of years as well.

LSE:NMC Income Statement Jan 16th 18
LSE:NMC Income Statement Jan 16th 18

How has it been able to do this? Let’s take a look at whether it is only attributable to industry tailwinds, or if NMC Health has seen some company-specific growth. The rise in earnings seems to be bolstered by a robust top-line increase beating its growth rate of expenses. Though this brought about a margin contraction, it has made NMC Health more profitable. Viewing growth from a sector-level, the UK healthcare providers and services industry has been enduring some headwinds in the prior twelve months, leading to an average earnings drop of -3.76%. This is a major change, given that the industry has constantly been delivering a a solid growth of 13.63% in the previous five years. This means that any recent headwind the industry is experiencing, NMC Health is less exposed compared to its peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as NMC Health gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research NMC Health to get a more holistic view of the stock by looking at:

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