After reading Winnebago Industries Inc’s (NYSE:WGO) most recent earnings announcement (25 November 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Winnebago Industries

How WGO fared against its long-term earnings performance and its industry

For the purpose of this commentary, I like to 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 enables me to assess different companies in a uniform manner using the latest information. For Winnebago Industries, its most recent earnings (trailing twelve month) is US$77.55M, which, against the prior year’s figure, has escalated by a substantial 59.43%. Since these values are somewhat myopic, I’ve created an annualized five-year value for Winnebago Industries’s earnings, which stands at US$41.12M This means on average, Winnebago Industries has been able to steadily grow its earnings over the past couple of years as well.

What’s the driver of this growth? Well, let’s take a look at whether it is only due to an industry uplift, or if Winnebago Industries has seen some company-specific growth. In the past couple of years, Winnebago Industries expanded its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US auto industry has been growing its average earnings by double-digit 29.61% over the prior year, and 12.17% over the last five years. This shows that whatever tailwind the industry is enjoying, Winnebago Industries is capable of amplifying this to its advantage.

What does this mean?

Winnebago Industries’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 Winnebago Industries to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.

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

• 2. Financial Health: Is WGO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.

• 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 25 November 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.