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Analyzing SEEK Limited’s (ASX:SEK) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess SEK’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for SEEK
Were SEK’s earnings stronger than its past performances and the industry?
I look at the ‘latest twelve-month’ data, 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 enables me to assess different companies on a similar basis, using new information. For SEEK, its latest trailing-twelve-month earnings is AU$358.10M, which, against the previous year’s level, has climbed up by over 100%. Given that these figures are fairly short-term, I have computed an annualized five-year value for SEEK’s earnings, which stands at AU$243.40M This means that, generally, SEEK has been able to increasingly grow its net income over the past couple of years as well.
What’s enabled this growth? Well, let’s take a look at whether it is solely attributable to industry tailwinds, or if SEEK has seen some company-specific growth. The rise in earnings seems to be supported by a substantial top-line increase beating its growth rate of expenses. Though this brought about a margin contraction, it has made SEEK more profitable. Inspecting growth from a sector-level, the Australian professional services industry has been enduring some headwinds in the past year, leading to an average earnings drop of -2.34%. This is a significant change, given that the industry has been delivering a positive rate of 3.29%, on average, over the previous five years. This means any near-term headwind the industry is experiencing, SEEK is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as SEEK gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research SEEK to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for SEK’s future growth? Take a look at our free research report of analyst consensus for SEK’s outlook.
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Financial Health: Is SEK’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 December 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.