Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Cooper-Standard Holdings Inc.'s (NYSE:CPS) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did CPS's recent performance beat its trend and industry?
CPS's trailing twelve-month earnings (from 30 June 2019) of US$151m has declined by -0.6% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 18%, indicating the rate at which CPS is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Cooper-Standard Holdings has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.2% exceeds the US Auto Components industry of 7.2%, indicating Cooper-Standard Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Cooper-Standard Holdings’s debt level, has declined over the past 3 years from 16% to 5.5%.
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 affecting its business. You should continue to research Cooper-Standard Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CPS’s future growth? Take a look at our free research report of analyst consensus for CPS’s outlook.
- Financial Health: Are CPS’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 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 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.