In This Article:
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Lisi SA’s (EPA:FII) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Lisi
Was FII weak performance lately part of a long-term decline?
FII’s trailing twelve-month earnings (from 30 June 2018) of €96m has declined by -9.9% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 9.3%, indicating the rate at which FII is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Lisi has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.2% exceeds the FR Aerospace & Defense industry of 3.7%, indicating Lisi has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Lisi’s debt level, has declined over the past 3 years from 12% to 10%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 30% to 57% over the past 5 years.
What does this mean?
Lisi’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Lisi 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 FII’s future growth? Take a look at our free research report of analyst consensus for FII’s outlook.
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Financial Health: Are FII’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 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.