When Coastway Bancorp Inc (NASDAQ:CWAY) announced its most recent earnings (31 March 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Coastway Bancorp performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see CWAY has performed. View our latest analysis for Coastway Bancorp
Commentary On CWAY’s Past Performance
I prefer to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine many different companies on a more comparable basis, using the latest information. For Coastway Bancorp, its most recent earnings (trailing twelve month) is US$2.48M, which compared to last year’s level, has plunged by -27.40%. Since these values are fairly myopic, I’ve calculated an annualized five-year value for CWAY’s earnings, which stands at US$1.34M This suggests that while earnings declined from the previous year, over time, Coastway Bancorp’s profits have been increasing on average.
What’s enabled this growth? Well, let’s take a look at if it is merely a result of industry tailwinds, or if Coastway Bancorp has experienced some company-specific growth. In the last couple of years, Coastway Bancorp increased its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Looking at growth from a sector-level, the US mortgage industry has been growing, albeit, at a unexciting single-digit rate of 8.88% over the prior twelve months, and a substantial 13.60% over the previous five years. This means that any uplift the industry is deriving benefit from, Coastway Bancorp has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Coastway Bancorp to get a more holistic view of the stock by looking at:
- Financial Health: Is CWAY’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.
- Valuation: What is CWAY worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CWAY is currently mispriced by the market.
- 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 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.