Examining LEONI AG’s (FRA:LEO) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess LEO’s latest performance announced on 30 September 2018 and compare these figures to its longer term trend and industry movements.
How LEO fared against its long-term earnings performance and its industry
LEO’s trailing twelve-month earnings (from 30 September 2018) of €130m has increased by 4.5% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.2%, indicating the rate at which LEO is growing has accelerated. How has it been able to do this? Let’s see if it is solely because of an industry uplift, or if LEONI has experienced some company-specific growth.
In terms of returns from investment, LEONI has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.3% is below the DE Auto Components industry of 4.9%, indicating LEONI’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for LEONI’s debt level, has declined over the past 3 years from 9.8% to 9.2%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 61% to 77% over the past 5 years.
What does this mean?
LEONI’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While LEONI has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research LEONI to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LEO’s future growth? Take a look at our free research report of analyst consensus for LEO’s outlook.
- Financial Health: Are LEO’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 September 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.