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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at A.P.N. Promise S.A.'s (WSE:PRO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
How PRO fared against its long-term earnings performance and its industry
PRO's trailing twelve-month earnings (from 31 March 2019) of zł9.4m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 14%, indicating the rate at which PRO is growing has accelerated. What's enabled this growth? Let's take a look at if it is solely owing to industry tailwinds, or if A.P.N. Promise has seen some company-specific growth.
In terms of returns from investment, A.P.N. Promise has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.3% exceeds the PL IT industry of 6.2%, indicating A.P.N. Promise has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for A.P.N. Promise’s debt level, has increased over the past 3 years from 29% to 38%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 117% to 105% over the past 5 years.
What does this mean?
A.P.N. Promise'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 A.P.N. Promise to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PRO’s future growth? Take a look at our free research report of analyst consensus for PRO’s outlook.
- Financial Health: Are PRO’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 31 March 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 firstname.lastname@example.org. 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.