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After looking at Euronext NV.’s (ENXTPA:ENX) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Euronext’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for Euronext
Commentary On ENX’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to examine various companies on a more comparable basis, using the most relevant data points. For Euronext, its most recent bottom-line (trailing twelve month) is €254.70M, which, in comparison to last year’s figure, has increased by 32.10%. Since these figures may be somewhat short-term, I’ve estimated an annualized five-year figure for ENX’s earnings, which stands at €158.06M This shows that, on average, Euronext has been able to consistently raise its profits over the last few years as well.
What’s enabled this growth? Let’s see whether it is merely due to industry tailwinds, or if Euronext has seen some company-specific growth. In the past couple of years, Euronext expanded its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the FR capital markets industry has been growing its average earnings by double-digit 22.26% in the past twelve months, and 15.66% over the past five. This means that any uplift the industry is deriving benefit from, Euronext is able to leverage this to its advantage.
What does this mean?
Euronext’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Euronext has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Euronext 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 ENX’s future growth? Take a look at our free research report of analyst consensus for ENX’s outlook.
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Financial Health: Is ENX’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 March 2018. 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.