Assessing Webjet Limited's (ASX:WEB) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess WEB's latest performance announced on 30 June 2019 and evaluate these figures to its historical trend and industry movements.
Commentary On WEB's Past Performance
WEB's trailing twelve-month earnings (from 30 June 2019) of AU$60m has jumped 45% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 24%, indicating the rate at which WEB is growing has accelerated. How has it been able to do this? Let's see whether it is only a result of industry tailwinds, or if Webjet has experienced some company-specific growth.
In terms of returns from investment, Webjet has fallen short of achieving a 20% return on equity (ROE), recording 9.4% instead. Furthermore, its return on assets (ROA) of 4.4% is below the AU Online Retail industry of 5.1%, indicating Webjet's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Webjet’s debt level, has declined over the past 3 years from 16% to 9.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.4% to 34% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Webjet gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Webjet to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for WEB’s future growth? Take a look at our free research report of analyst consensus for WEB’s outlook.
- Financial Health: Are WEB’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.
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.
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. Thank you for reading.