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Has AB Fagerhult (STO:FAG) Improved Earnings In Recent Times?

Simply Wall St

Assessing AB Fagerhult's (OM:FAG) 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 FAG's latest performance announced on 30 June 2019 and evaluate these figures to its historical trend and industry movements.

See our latest analysis for AB Fagerhult

Have FAG's earnings improved against past performances and the industry?

FAG's trailing twelve-month earnings (from 30 June 2019) of kr493m has increased by 0.2% 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 17%, indicating the rate at which FAG is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the rest of the industry is experiencing the hit as well.

OM:FAG Income Statement, October 13th 2019

In terms of returns from investment, AB Fagerhult has fallen short of achieving a 20% return on equity (ROE), recording 9.5% instead. Furthermore, its return on assets (ROA) of 4.2% is below the SE Electrical industry of 6.8%, indicating AB Fagerhult's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for AB Fagerhult’s debt level, has declined over the past 3 years from 13% to 6.5%.

What does this mean?

AB Fagerhult's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While AB Fagerhult has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research AB Fagerhult to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for FAG’s future growth? Take a look at our free research report of analyst consensus for FAG’s outlook.
  2. Financial Health: Are FAG’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.
  3. 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.

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 editorial-team@simplywallst.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.