In this commentary, I will examine HiQ International AB (publ)'s (OM:HIQ) latest earnings update (31 December 2019) and compare these figures against its performance over the past couple of years, as well as how the rest of the it industry performed. As an investor, I find it beneficial to assess HIQ’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
Check out our latest analysis for HiQ International
How HIQ fared against its long-term earnings performance and its industry
HIQ's trailing twelve-month earnings (from 31 December 2019) of kr176m has jumped 16% 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 HIQ is growing has accelerated. How has it been able to do this? Let's take a look at if it is merely due to an industry uplift, or if HiQ International has experienced some company-specific growth.
In terms of returns from investment, HiQ International has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14% exceeds the SE IT industry of 8.0%, indicating HiQ International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for HiQ International’s debt level, has declined over the past 3 years from 26% to 25%.
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 HiQ International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research HiQ International to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for HIQ’s future growth? Take a look at our free research report of analyst consensus for HIQ’s outlook.
-
Financial Health: Are HIQ’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.
-
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 2019. This may not be consistent with full year annual report figures.
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.
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. Thank you for reading.