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Today I will examine Poujoulat SA’s (ENXTPA:ALPJT) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of ALPJT’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Poujoulat
How Well Did ALPJT Perform?
I like to 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 technique allows me to analyze different companies in a uniform manner using the latest information. For Poujoulat, its latest trailing-twelve-month earnings is €859.00K, which, relative to the prior year’s figure, has fallen by -6.02%. Given that these figures may be relatively nearsighted, I have determined an annualized five-year figure for Poujoulat’s net income, which stands at €4.15M This doesn’t seem to paint a better picture, as earnings seem to have consistently been deteriorating over time.
Why is this? Let’s examine what’s going on with margins and whether the entire industry is feeling the heat. Revenue growth over the past couple of years, has been positive, nevertheless earnings growth has been declining. This means Poujoulat has been increasing expenses, which is hurting margins and earnings, and is not a sustainable practice. Inspecting growth from a sector-level, the FR building industry has been growing, albeit, at a unexciting single-digit rate of 6.72% in the prior twelve months, and a flatter 1.80% over the past five. This means that whatever tailwind the industry is deriving benefit from, Poujoulat has not been able to reap as much as its industry peers.
What does this mean?
Poujoulat’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Typically companies that experience a prolonged period of decline in earnings are going through some sort of reinvestment phase with the aim of keeping up with the latest industry growth and disruption. I suggest you continue to research Poujoulat to get a more holistic view of the stock by looking at:
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Financial Health: Is ALPJT’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 30 September 2017. 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.