When Advanced Share Registry Limited (ASX:ASW) released its most recent earnings update (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Advanced Share Registry’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not ASW actually performed well. Below is a quick commentary on how I see ASW has performed. Check out our latest analysis for Advanced Share Registry
How Well Did ASW Perform?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to examine various companies on a more comparable basis, using the most relevant data points. For Advanced Share Registry, its most recent bottom-line (trailing twelve month) is AU$1.70M, which, in comparison to the previous year’s figure, has plunged by -13.92%. Given that these figures are relatively myopic, I have determined an annualized five-year value for Advanced Share Registry’s earnings, which stands at AU$1.66M This means that despite the fact that earnings declined against the prior year, over time, Advanced Share Registry’s profits have been increasing on average.
What’s enabled this growth? Let’s take a look at if it is only a result of industry tailwinds, or if Advanced Share Registry has seen some company-specific growth. The rise in earnings seems to be propelled by a solid top-line increase outpacing its growth rate of expenses. Though this has led to a margin contraction, it has made Advanced Share Registry more profitable. Scanning growth from a sector-level, the Australian capital markets industry has been growing, albeit, at a unexciting single-digit rate of 8.71% over the prior twelve months, and a substantial 12.74% over the past five years. This means whatever uplift the industry is profiting from, Advanced Share Registry has not been able to leverage it as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Advanced Share Registry to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.