In This Article:
In this article, I will take a look at Emak SpA’s (BIT:EM) most recent earnings update (30 June 2018) and compare these latest figures against its performance over the past few years, along with how the rest of EM’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
See our latest analysis for Emak
Did EM beat its long-term earnings growth trend and its industry?
EM’s trailing twelve-month earnings (from 30 June 2018) of €22m has jumped 24% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which EM is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is merely owing to industry tailwinds, or if Emak has seen some company-specific growth.
In terms of returns from investment, Emak has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.4% is below the IT Consumer Durables industry of 7.7%, indicating Emak’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Emak’s debt level, has increased over the past 3 years from 5.9% to 9.0%.
What does this mean?
Emak’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Emak to get a more holistic view of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for EM’s future growth? Take a look at our free research report of analyst consensus for EM’s outlook.
-
Financial Health: Are EM’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.
-
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.