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Investors with a long-term horizong may find it valuable to assess Pfeiffer Vacuum Technology AG's (FRA:PFV) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Pfeiffer Vacuum Technology is currently performing.
Commentary On PFV's Past Performance
PFV's trailing twelve-month earnings (from 31 March 2019) of €62m has increased by 5.2% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 15%, indicating the rate at which PFV is growing has slowed down. To understand what's happening, let’s take a look at what’s transpiring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Pfeiffer Vacuum Technology has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 9.6% exceeds the DE Machinery industry of 5.6%, indicating Pfeiffer Vacuum Technology has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Pfeiffer Vacuum Technology’s debt level, has declined over the past 3 years from 16% to 16%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 15% to 20% over the past 5 years.
What does this mean?
Though Pfeiffer Vacuum Technology's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Pfeiffer Vacuum Technology to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PFV’s future growth? Take a look at our free research report of analyst consensus for PFV’s outlook.
- Financial Health: Are PFV’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 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.