Assessing CAE Inc.'s (TSE:CAE) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess CAE's recent performance announced on 30 June 2019 and evaluate these figures to its long-term trend and industry movements.

Check out our latest analysis for CAE

Was CAE's weak performance lately a part of a long-term decline?

CAE's trailing twelve-month earnings (from 30 June 2019) of CA$322m has declined by -9.5% 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 12%, indicating the rate at which CAE is growing has slowed down. What could be happening here? Let's examine what's going on with margins and if the rest of the industry is facing the same headwind.

In terms of returns from investment, CAE has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.3% is below the CA Aerospace & Defense industry of 6.7%, indicating CAE's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for CAE’s debt level, has declined over the past 3 years from 8.6% to 7.7%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 69% to 100% over the past 5 years.

What does this mean?

Though CAE's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research CAE to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for CAE’s future growth? Take a look at our free research report of analyst consensus for CAE’s outlook.

2. Financial Health: Are CAE’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.

3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.