Measuring Tile Shop Holdings Inc’s (NASDAQ:TTS) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess TTS’s recent performance announced on 31 March 2018 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Tile Shop Holdings
Was TTS’s recent earnings decline indicative of a tough track record?
TTS recently turned a profit of US$6.82m (most recent trailing twelve-months) compared to its average loss of -US$28.16k over the past five years.
Over the last couple of years, Tile Shop Holdings grew its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US specialty retail industry has been growing, albeit, at a muted single-digit rate of 6.67% in the prior year, and 5.88% over the past five years. This means that whatever uplift the industry is enjoying, Tile Shop Holdings has not been able to gain as much as its average peer.
In terms of returns from investment, Tile Shop Holdings has not invested its equity funds well, leading to a 4.68% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 3.20% is below the US Specialty Retail industry of 7.16%, indicating Tile Shop Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Tile Shop Holdings’s debt level, has declined over the past 3 years from 10.21% to 9.45%.
What does this mean?
Tile Shop Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research Tile Shop Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for TTS’s future growth? Take a look at our free research report of analyst consensus for TTS’s outlook.
- Financial Health: Is TTS’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 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.