For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Playa Hotels & Resorts N.V. (NASDAQ:PLYA) useful as an attempt to give more color around how Playa Hotels & Resorts is currently performing.
Were PLYA's earnings stronger than its past performances and the industry?
PLYA recently turned a profit of US$24m (most recent trailing twelve-months) compared to its average loss of -US$20.4m over the past five years.
In terms of returns from investment, Playa Hotels & Resorts has fallen short of achieving a 20% return on equity (ROE), recording 2.8% instead. Furthermore, its return on assets (ROA) of 3.8% is below the US Hospitality industry of 5.9%, indicating Playa Hotels & Resorts's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Playa Hotels & Resorts’s debt level, has declined over the past 3 years from 4.5% to 3.5%.
What does this mean?
Playa Hotels & Resorts's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Playa Hotels & Resorts has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Playa Hotels & Resorts to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PLYA’s future growth? Take a look at our free research report of analyst consensus for PLYA’s outlook.
- Financial Health: Are PLYA’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 2019. This may not be consistent with full year annual report figures.
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