Did PerkinElmer Inc’s (NYSE:PKI) Recent Earnings Growth Beat The Trend?
Understanding how PerkinElmer Inc (NYSE:PKI) 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 PerkinElmer is doing by comparing its latest earnings with its long-term trend as well as the performance of its life sciences industry peers. View our latest analysis for PerkinElmer
Did PKI’s recent earnings growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I 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 technique enables me to assess many different companies in a uniform manner using the most relevant data points. For PerkinElmer, its most recent bottom-line (trailing twelve month) is $257.6M, which compared to the prior year’s level, has jumped up by 30.11%. Since these figures may be fairly myopic, I’ve created an annualized five-year figure for PerkinElmer’s earnings, which stands at $139.9M. This means that, on average, PerkinElmer has been able to consistently improve its earnings over the last couple of years as well.
What’s the driver of this growth? Well, let’s take a look at if it is only attributable to industry tailwinds, or if PerkinElmer has experienced some company-specific growth. Over the past few years, PerkinElmer grew its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US life sciences industry has been growing, albeit, at a subdued single-digit rate of 9.58% over the prior year, and a substantial 15.32% over the past five. This suggests that any tailwind the industry is benefiting from, PerkinElmer is capable of leveraging this to its advantage.
What does this mean?
PerkinElmer’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While PerkinElmer has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research PerkinElmer to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PKI’s future growth? Take a look at our free research report of analyst consensus for PKI’s outlook.
2. Financial Health: Is PKI’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 01 October 2017. 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.
