Assessing Focusrite Plc’s (AIM:TUNE) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess TUNE’s latest performance announced on 31 August 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for Focusrite

Commentary On TUNE’s Past Performance

For the most up-to-date info, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to analyze many different companies on a similar basis, using new information. “For Focusrite, its “, most recent earnings is £8.6M, which compared to the prior year’s figure, has increased by 36.72%. Given that these values are somewhat short-term thinking, I have computed an annualized five-year figure for TUNE’s net income, which stands at £5.9M. This means on average, Focusrite has been able to consistently improve its earnings over the past few years as well.

How has it been able to do this? Well, let’s take a look at whether it is merely a result of industry tailwinds, or if Focusrite has experienced some company-specific growth. Over the past few years, Focusrite grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the UK household durables industry has been growing its average earnings by double-digit 18.90% in the prior twelve months, and 24.99% over the previous few years. This means any tailwind the industry is profiting from, Focusrite is capable of amplifying this to its advantage.

What does this mean?

Though Focusrite’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Focusrite gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Focusrite to get a better picture of the stock by looking at:

1. Financial Health: Is TUNE’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.

2. Valuation: What is TUNE worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TUNE is currently mispriced by the market.

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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.