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Assessing Persistent Systems Limited’s (NSE:PERSISTENT) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PERSISTENT’s recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.
Check out our latest analysis for Persistent Systems
How PERSISTENT fared against its long-term earnings performance and its industry
PERSISTENT’s trailing twelve-month earnings (from 31 December 2018) of ₹3.4b has increased by 5.8% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.0%, indicating the rate at which PERSISTENT is growing has slowed down. To understand what’s happening, let’s look at what’s going on with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Persistent Systems has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 10% exceeds the IN IT industry of 7.0%, indicating Persistent Systems has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Persistent Systems’s debt level, has declined over the past 3 years from 18% to 17%.
What does this mean?
Though Persistent Systems’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Persistent Systems gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Persistent Systems to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for PERSISTENT’s future growth? Take a look at our free research report of analyst consensus for PERSISTENT’s outlook.
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Financial Health: Are PERSISTENT’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. On rare occasion, data errors may occur. Thank you for reading.