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Did Agile Group Holdings Limited's (HKG:3383) Recent Earnings Growth Beat The Trend?

Simply Wall St

Understanding how Agile Group Holdings Limited (HKG:3383) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Agile Group Holdings is doing by comparing its latest earnings with its long-term trend as well as the performance of its real estate industry peers.

Check out our latest analysis for Agile Group Holdings

How Did 3383's Recent Performance Stack Up Against Its Past?

3383's trailing twelve-month earnings (from 30 June 2019) of CN¥8.4b has increased by 6.5% 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 24%, indicating the rate at which 3383 is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and if the rest of the industry is facing the same headwind.

SEHK:3383 Income Statement, September 4th 2019

In terms of returns from investment, Agile Group Holdings has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 3.8% exceeds the HK Real Estate industry of 2.9%, indicating Agile Group Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Agile Group Holdings’s debt level, has increased over the past 3 years from 10.0% to 12%.

What does this mean?

Though Agile Group Holdings's past data is helpful, it is only one aspect of my investment thesis. 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 Agile Group Holdings to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 3383’s future growth? Take a look at our free research report of analyst consensus for 3383’s outlook.
  2. Financial Health: Are 3383’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.