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For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Karin Technology Holdings Limited (SGX:K29) useful as an attempt to give more color around how Karin Technology Holdings is currently performing.
View our latest analysis for Karin Technology Holdings
How Did K29's Recent Performance Stack Up Against Its Past?
K29's trailing twelve-month earnings (from 30 June 2019) of HK$32m has jumped 15% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -11%, indicating the rate at which K29 is growing has accelerated. What's the driver of this growth? Let's take a look at if it is solely a result of industry tailwinds, or if Karin Technology Holdings has seen some company-specific growth.
In terms of returns from investment, Karin Technology Holdings has fallen short of achieving a 20% return on equity (ROE), recording 7.1% instead. Furthermore, its return on assets (ROA) of 3.8% is below the SG Electronic industry of 4.6%, indicating Karin Technology Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Karin Technology Holdings’s debt level, has increased over the past 3 years from 2.7% to 7.8%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 29% to 28% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. I suggest you continue to research Karin Technology Holdings to get a more holistic view of the stock by looking at:
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Financial Health: Are K29’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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Valuation: What is K29 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 K29 is currently mispriced by the market.
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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 June 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.
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