For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Allied Motion Technologies Inc (NASDAQ:AMOT) useful as an attempt to give more color around how Allied Motion Technologies is currently performing. Check out our latest analysis for Allied Motion Technologies
How AMOT fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 assess various companies on a more comparable basis, using the latest information. For Allied Motion Technologies, its most recent trailing-twelve-month earnings is US$9.58M, which, against the previous year’s level, has risen by a somewhat muted 2.10%. Given that these values are fairly nearsighted, I’ve calculated an annualized five-year figure for Allied Motion Technologies’s earnings, which stands at US$8.44M This means that, on average, Allied Motion Technologies has been able to gradually raise its profits over the past couple of years as well.
What’s the driver of this growth? Let’s see whether it is only because of industry tailwinds, or if Allied Motion Technologies has seen some company-specific growth. The climb in earnings seems to be supported by a substantial top-line increase outpacing its growth rate of costs. Though this has led to a margin contraction, it has made Allied Motion Technologies more profitable. Inspecting growth from a sector-level, the US electrical industry has been growing, albeit, at a unexciting single-digit rate of 7.05% in the past year, and a substantial 13.48% over the past five years. This means whatever uplift the industry is benefiting from, Allied Motion Technologies has not been able to reap as much as its average peer.
What does this mean?
Allied Motion Technologies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Allied Motion Technologies has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Allied Motion Technologies to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AMOT’s future growth? Take a look at our free research report of analyst consensus for AMOT’s outlook.
- Financial Health: Is AMOT’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.