Should You Be Content With Horizon Bancorp’s (undefined:HBNC) 8% Earnings Growth?
Assessing Horizon Bancorp’s (NASDAQ:HBNC) 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 HBNC’s latest performance announced on 30 September 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for Horizon Bancorp
How Well Did HBNC Perform?
I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to analyze various companies on a more comparable basis, using the most relevant data points. For Horizon Bancorp, the latest earnings is $31.1M, which, against the prior year’s level, has climbed up by 27.28%. Given that these values are somewhat myopic, I have determined an annualized five-year value for HBNC’s earnings, which stands at $18.7M. This means that, on average, Horizon Bancorp has been able to steadily improve its earnings over the past few years as well.
What’s the driver of this growth? Let’s see whether it is merely owing to an industry uplift, or if Horizon Bancorp has seen some company-specific growth. Over the past few years, Horizon Bancorp grew its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 10.03% in the prior twelve months, and a more subdued 8.99% over the previous five years. This means whatever uplift the industry is gaining from, Horizon Bancorp is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. 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 Horizon Bancorp to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HBNC’s future growth? Take a look at our free research report of analyst consensus for HBNC’s outlook.
2. Financial Health: Is HBNC’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
