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Measuring Comtech Telecommunications Corp.'s (NASDAQ:CMTL) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess CMTL's recent performance announced on 30 April 2019 and compare these figures to its historical trend and industry movements.
Did CMTL perform worse than its track record and industry?
CMTL's trailing twelve-month earnings (from 30 April 2019) of US$26m has declined by -11% 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 5.5%, indicating the rate at which CMTL is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Comtech Telecommunications has fallen short of achieving a 20% return on equity (ROE), recording 5.0% instead. Furthermore, its return on assets (ROA) of 4.3% is below the US Communications industry of 4.8%, indicating Comtech Telecommunications's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Comtech Telecommunications’s debt level, has increased over the past 3 years from 2.8% to 6.7%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 52% to 33% over the past 5 years.
What does this mean?
Comtech Telecommunications's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Comtech Telecommunications to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CMTL’s future growth? Take a look at our free research report of analyst consensus for CMTL’s outlook.
- Financial Health: Are CMTL’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 April 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 email@example.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.