Understanding AS Company SA.’s (ATSE:ASCO) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how AS is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for AS
How ASCO fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use 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 blend enables me to assess many different companies on a similar basis, using new information. For AS, its most recent earnings (trailing twelve month) is €2.79M, which, against last year’s figure, has escalated by over 100%. Given that these figures may be relatively nearsighted, I’ve created an annualized five-year figure for ASCO’s net income, which stands at €1.14M This means that, on average, AS has been able to increasingly improve its net income over the last few years as well.
What’s enabled this growth? Let’s see if it is merely a result of an industry uplift, or if AS has experienced some company-specific growth. Over the past couple of years, AS grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the GR leisure industry has been growing, albeit, at a muted single-digit rate of 3.79% in the prior year, and a substantial 13.49% over the previous five years. This shows that any recent headwind the industry is experiencing, the impact on AS has been softer relative to its peers.
What does this mean?
AS’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While AS 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 AS to get a more holistic view of the stock by looking at:
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Financial Health: Is ASCO’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 ASCO 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 ASCO 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 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.